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Marine Insurance Market Sees Strong Growth in 2022

Felicity Ace seen burning in the Atlantic Ocean off the Azores Islands. Picture was released Friday, February 18, 2022 by the Portuguese Navy. Photo courtesy Portuguese Navy

Marine Insurance Market Sees Strong Growth in 2022

Mike Schuler
Total Views: 897
November 10, 2023

Global marine insurance premiums in 2022 increased by 8.3% to $35.8 billion, driven by trade rebound, rising asset values, reduced market capacity, and premium adjustments, the International Union of Marine Insurance (IUMI) revealed in its annual report.

European markets expanded, but certain Asian markets saw slower growth due to economic factors.

Ocean hull premiums increased by 5.7% to $8.4 billion due to factors such as increased activity, more vessels, rising values, and reduced market capacity. Despite this growth, claims remained low, leading to positive loss ratios in almost all regions.

Premiums for cargo insurance increased by 8.3% to $20.5 billion, indicating a post-pandemic recovery in global trade. Loss ratios also returned to more normal levels, reaching their lowest point since 2015 in 2022.

The offshore energy sector experienced impressive growth in 2022, with a premium base of $4.1 billion, a notable increase of 7.3%. Higher oil prices drove this growth, leading to increased offshore activity and higher average day rates. Losses remained low, resulting in positive loss ratios in recent years.

The report also provides an update on IUMI’s Major Claims Database, which now includes cargo claims based on 13 data fields for the fourth consecutive year. Major losses are analyzed in terms of severity, frequency, location, and cause.

“Our annual Stats Report has become a highly anticipated descriptor and analysis of the current health of the marine insurance market,” said Lars Lange, Secretary General of IUMI. He said the strong performance across all business lines, with increased global premium base and improved loss ratios, can be attributed to post-pandemic recovery in global trade and enhanced underwriting discipline.

“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,” Lange concluded.

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