What is happening in the marine insurance market?

The International Union of Marine Insurance (IUMI) has released its latest assessment of marine insurance trends worldwide, pointing to continued growth across all lines of business.

Presenting the figures during its 150th annual conference in Berlin, IUMI noted that the global marine insurance premium base will reach $38.9 billion by 2023 – an increase of 5.9% compared to the previous year. Growth was seen across the board, with marine energy up 4.6%, cargo insurance up 6.2%, and marine premiums up 7.6%.

Cargo insurance has the largest share of the premium base at 56.9%, followed by ocean hull at 23.6%, marine power at 11.9%, and marine liability at 7.7%. Geographically, Europe remained the leading market, receiving 48.5% of global premiums, while Asia-Pacific held 28.1%, Latin America 10.9%, and North America 7%.

Notably, European premiums have been on the rise since 2019, and Asia has recovered slightly since 2016. Both Latin and North America also showed a slight increase in their premiums.

According to Astrid Seltmann, vice chair of IUMI's facts and figures committee, several factors contributed to the growth.

“Global premiums reflect the combination of volumes and prices that can be paid per unit,” he noted. “The motivations for the increase in premiums are usually the continuous increase in the value and prices of world trade (commodity), accompanied by the increase in the price of ships (vessels), or the increase in the price of oil which creates more work in the marine energy sector.

“Broadly speaking, national conditions will have an impact on premiums in many regions, as will general market conditions, particularly volume. All in all, 2023 looks to be a good year for maritime writers.”

Broken down by line of business, overseas energy premiums grew by 4.6% in 2023, reaching $4.6 billion. Lloyd's and International Underwriting Association markets in the UK remained dominant, holding 28.2% and 36.8% shares respectively.

Cargo insurance, representing a global premium base of $22.1 billion, saw a 6.2% increase from 2022. All regions reported growth, with Europe having the largest share at 39.8%, followed by Asia-Pacific at 32.2%. Cargo premium growth tends to coincide with global trade volume, which has normalized following the disruption caused by COVID-19.

The ocean hull industry reported premiums of $9.2 billion in 2023, up 7.6% compared to the previous year. Europe had the largest share at 51.8%, followed by Asia-Pacific at 35.5%. The post-COVID resumption of shipping activity has boosted vessel prices, particularly offshore support vessels, and helped narrow the gap between vessel values ​​and premiums.

Summarizing the market performance, Jun Lin, chairman of the facts and figures committee of IUMI, said: “Overall, 2023 was a good year for marine underwriters with market development seen in all sectors of the marine insurance business. Global trade has continued to grow, which has had a positive impact on global rates, especially in cargo insurance.”

According to the claims, he revealed that things were limited to 2023. Lin also added that although headwinds still exist, the market is in a good position to adapt.

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