IUMI reports strong growth in marine insurance on back of tight market

Reduced insurance capacity and higher premiums combined with increased activity and higher asset values delivered significant growth for the global marine insurance market in 2022, according to latest statistics from the International Union of Marine Insurance (IUMI). The 2023 analysis of the global marine insurance market, published in IUMI Stats, reports on the health of the marine insurance sector within the framework of the global economy, trade and shipping. This year’s report finds that global marine insurance premiums in 2022 totalled $35.8bn – an 8.3% uplift on 2021. “The post-pandemic rebound in trade, increased asset values, reduced market capacity and an adjustment in premiums were all likely to have exerted an influence. European markets continued to enjoy growth while some Asian markets had slowed due to a range of economic factors,” comments IUMI. Ocean hull premiums were reported at $8.4bn, up by 5.7% on the previous year. “More activity, more vessels, rising values and reduced market capacity were responsible. Claims continued to be low, resulting in positive loss ratios for nearly all regions,” says the union. Premiums for cargo insurance reached $20.5bn, representing an 8.3% uptick on last year and continuing the trend for market development in this sector. IUMI says this came on the back of a post-pandemic rebound in global trade. Loss ratios had returned to more “normal” levels and for 2022 had started at their lowest point since 2015. The offshore energy sector continued its three-year run of premium base growth, reporting $4.1bn for 2022, an increase of 7.3%. “The uptick in oil prices was largely responsible, translating into increased offshore activity and a rise in average day rates. Losses had remained relatively low and recent years’ loss ratios were positive,” says IUMI. Commenting on this year’s report, IUMI secretary general Lars Lange adds: “This year, it is gratifying to note that all business lines have performed relatively strongly, showing an increase in the global premium base and a better performance in terms of loss ratios. This is largely off the back of a post-pandemic rebound in global trade but can also be attributed to more disciplined and effective underwriting. Insurers are continuing to operate in a relatively low claims environment, which is good news for all concerned, but we must be watchful for a return to more usual loss levels now that shipping and offshore activity has normalised following Covid.” One key area that will develop quickly in future and require an innovative response from the underwriting community is offshore energy, notes IUMI in its report. It points out that as peak oil is approached, the growth in lower-carbon technology will accelerate. Floating wind capacity, for example, is forecast to grow exponentially over the next few years as increased levels of investment are made. The evolution of energy production will give rise to a new set of technologies with new risks that will need to be insured, IUMI explains. “Carbon capture and storage facilities are likely to feature large over the coming years but underwriters are already used to insuring subterranean structures. Other developments currently underway include methane gas leak detection, reducing GHG emissions, as well as the electrification of offshore platforms using renewable energy sources,” says the union. “Underwriters will need to innovate and re-invent their insurance products so they remain fit for purpose. Insurance must be an enabler and underwriters should, in cooperation with their clients, develop the competence and products needed to support this vital energy transition process,” advises IUMI.

IUMI reports strong growth in marine insurance on back of tight market

Innovation needed to remain fit for purpose in offshore energy

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