Marine Insurance Premiums See Modest Increase Amid Market Uncertainty -IUMI

maersk honam fire
Maersk Honam on fire in the Arabian Sea in March 2018

Marine underwriting premiums rose by just one percent last year, but future market development remains uncertain as the marine insurance sector faces significant challenges, the International Union of Marine Insurance said Monday.

IUMI this week presented its analysis of the latest marine insurance market trends, revealing that marine underwriting premiums for 2018 were recorded at US $28.9 billion, which represents only a one percent rise from 2017.

With significant challenges facing the market, the modest increase is not significant enough to herald an upturn in the overall market, IUMI said.

“Changes to frame conditions are the most likely reason for the modest increase in premiums as opposed to any real market development,” said Vice-Chair of IUMI’s Facts & Figures Committee, Astrid Seltmann.

Seltmann said global uncertainties, including trade tensions, will continue to impact all lines of business in marine insurance, but particularly the cargo and offshore energy sectors. Seltmann also highlighted an increase in the frequency of fires on containerships, especially ones starting in the cargo areas of vessels such as Maersk Honam and Grande America.

“This trend has been observed for some years and the newest statistics show a clear further increase in 2019,” Seltmann said. “These fires pose a threat to the crew and cause severe damage to both vessel and cargo. IUMI is working with a range of industry bodies to improve the prevention of such events as well as fire-fighting capabilities onboard.”

According to the IUMI, the $28.9 billion in global premiums were split between Europe 46.4%, Asia/Pacific 30.7%, Latin America 10.4%, North America 6.2% and Other 6.3%. By line of business, cargo continued to represent the largest share with 57.4% in 2018, followed by hull (24.4%), offshore energy (11.4%) and marine liability (6.7%).