Small recovery from COVID-19 seen in global marine insurance  market

Global marine insurance premiums across all sectors are relatively stable despite the global pandemic, the International Union of Marine Insurance (IUMI) reported today.” Early signs of a modest market recovery are encouraging although COVID-19 has injected a new level of uncertainty.” 

In its 2020 analysis of the global marine insurance market, IUMI presents a range of statistical data from a variety of sources, including IUMI’s own data, to provide an insight into the marine insurance market within the context of global trade and shipping. 

IUMI’s Secretary General, Lars Lange explains: “Working with a number of valued partners, our Facts and Figures Committee has produced this year’s statistical analysis which also includes insight and opinion. IUMI collects data on global marine premiums which we present alongside loss ratios, claims and other data. Whilst our data covers 2019, we also try to comment on the general health of marine underwriting but that has been extremely challenging this year.

“The coronavirus pandemic has significantly impacted trade, shipping, commodity prices and consumer activity which in turn, means the outlook for marine insurance is far from certain. Despite this, our analysis is reporting the beginnings of a modest market recovery in most business lines.”

Lars Lange continues: “This year, and for the first time, our report also includes the initial findings from IUMI’s major claims database. Over the past three years we have recruited 22 national insurance associations who, together, have submitted 6,800 records of major marine losses.  Our analysis of the major cargo claims data can be seen in the report. I’d like to thank our partner, Boston Consulting Group, and the project team for undertaking such a large and valuable project”.   

Highlights from this year’s statistical analysis includes: The gap between global hull premiums and global tonnage continues to widen, although at a slower rate. Hull loss ratios have improved slightly and a benign loss environment prevails (with the continued exception of large vessel fires). This, coupled with a reduction in underwriting capacity, seems likely to predict a market recovery, but from an exceptionally low base.  

Loss ratios for cargo underwriting have improved slightly. But global trade dipped sharply as a result of COVID-19 and accumulation of risk onboard and ashore continues to grow. A market recovery across all regions is reported, however. 

The fortunes of the offshore energy market tend to mirror the oil price which has been unstable, particularly during the pandemic. However, a low impact hurricane season (to date) is positive but a fragile balance between a low premium base and a low claims environment exists. (Photo Hapag Lloyd)