The maritime sector continues to deliver the vast majority of goods across the globe.

Marine insurers have been in Singapore this week for the International Union of Marine Insurance (IUMI) annual conference, and as they say numbers rarely lie.

Despite the threats posed by geopolitical risks and conflicts the global marine insurance premium base for 2024 was reported as $39.92 billion, representing a 1.5% increase on the previous year.

By line of business, the largest share was commanded by transport/cargo at 57.23% followed by global hull 23.51%, offshore energy 11.71% and marine liability (other than P&I covered by International Group clubs) 7.55%.

In delivering the figures IUMI’s chief analyst, Veith Huesmann said: “We’ve seen premium income in Asia grow steadily since 2016, supported by new product lines and increasing intra-Asia trade. By contrast, Europe and Latin America appear to have plateaued since 2023. Changes in premium income tend to stem from a rise in global trade (for cargo) coupled with increases in vessel values (for hull) or an uptick in the oil price encouraging more activity in the offshore energy sector, although this hasn’t been the case in 2024. Geopolitical instability will impact specific regions, of course. Added to this, general market conditions, specifically capacity, will also have an effect and 2024 saw more capacity enter all markets.

“The other side of the coin is the claims environment which continues to be relatively benign, and this has translated into a good performance – in terms of loss ratios – for the hull and cargo business lines. However, the perennial challenges of ever-larger vessels, net-zero, mis-declared cargoes, accumulations, vessels fires and high-risk zones remain.”

However, despite the premium growth there are challenges on the horizon.

The ageing of the global fleet presents additional challenges. Delayed scrapping leads to older tonnage remaining in service which, in turn, raises the frequency of machinery claims. Fires on car carriers and container vessels also continue to be a major issue for hull and cargo insurers. Emerging factors such as the introduction of alternative fuels, new technologies such as 3D-printed spare parts present fresh underwriting challenges. Growing inflation of costs further contributes to higher probabilities of constructive total losses.

Jun Lin, chair of the IUMI Facts & Figures Committee explained: “The marine insurance sector is relatively stable but faces some strong headwinds, with geopolitical and trade tensions creating an unprecedented level of uncertainty across global trade. While growth in seaborne trade has slowed — partly due to tariffs and a normalisation following the extraordinary demand surge in 2024 — it is encouraging to see growth in cleaner fuel volumes outpacing those of fossil fuels.

“Whilst tariffs are having an impact, put in context, they are currently affecting less than 4% of global trade.

“Interest rates globally have already started to fall and the consequent reduction in inflation will likely impact overall profitability for most insurers. Similarly, the weakening US dollar will squeeze top line premium income and add to claims costs for those insurers paying out in non-US dollar currencies.

“At the same time, an ageing global fleet presents growing challenges, from machinery failures to increased maintenance demands and seafarer well-being. Claims were relatively benign in 2023 and 2024 but this year has seen an uptick particularly in groundings, large vessel fires and, of course, war-related losses.”

While all is not calm the marine insurance sector looks set to navigate the challenge and say it is determined not to leave its maritime clients all at sea.

Jon Guy,

Editor, Emerging Risks