According to IUMI, with significant challenges facing the market, the modest increase is not significant to indicate an upturn in the fortunes of the marine insurance sector.

Commenting on the findings, Vice-Chair of IUMI’s Facts & Figures Committee, Astrid Seltmann, said that changes to frame conditions are the most likely reason for the modest increase in premiums.

Ongoing global uncertainties, including the current tensions in trade, will continue to impact all sectors but specifically cargo and offshore energy. The continued downward adjusting of global trade growth is not helpful for marine cargo underwriting going forward

What is more, a special concern is the increase in the frequency of fires on container ships, especially those starting in the cargo area of vessels. This trend has been reported for some years and the latest statistics show a clear further increase in 2019. These fires are a threat to the crew and cause important damage to both vessel and cargo.

As for the USD 28.9 billion global income, this was split between these geographic regions:

  • Europe 46.4%;
  • Asia/Pacific 30.7%
  • Latin America 10.4%
  • North America 6.2%
  • Other 6.3%

In addition, 2018 saw Europe's global share fall from 49.2% (2017) to 46.4% and Asia’s share rise from 29.2% (2017) to 30.7%.

Regarding global marine premium by line of business, cargo still represents the largest share with 57.4% in 2018, hull 24.4%, offshore energy 11.4% and marine liability (excluding than IGP&I) 6.7%.


As far as premium income for marine cargo insurance, it was reported to be USD 16.6 billion for 2018, representing a 2.5% increase on the 2017 result. The modest increase can be largely attributed to continued growth in world trade, along with exchange rate fluctuations which tend to affect cargo premiums more strongly than other sectors.

Trade growth continues, affecting positively the sector, while macro-economic uncertainties like national and regional trade restrictions, as well as changes to economic and political frame conditions could have a negative effect.


Moreover, covered risks are representing stock rather than transit exposure more and more, with accumulation risks growing. The risk of large event losses, both nat-cat and man-made, is significantly rising both on single sites and single assets.

The 2017/18 underwriting years experienced a relatively high nat-cat impact from hurricanes, earthquakes and flooding. 2018 was also heavily impacted by the cargo loss from Maersk Honam. Technical loss ratios are relatively stable at about 70% in Europe, while Asia is still a developing account and loss ratios are starting to rise in that area, approaching 60%.


In 2018, worldwide underwriting premiums for the hull sector achieved USD 7 billion, which marks no change from 2017. A 0% change in premiums is worrying when set against a continually increasing global fleet and higher single risk exposure due to the trend for ever-larger vessels.

For the silver lining, claims frequency and cost per vessel remain stable at a moderate level, and the long-term trend for total losses has also stabilized with a fluctuation below 0.1%. Nevertheless, the major losses appear to have returned in 2019 after unusually low numbers during 2016-2018.

This is likely to impact on the 2018 and 2019 underwriting years. In addition, the 2018 fire at a major yard in Germany represented a new dimension of claims impacting the builder’s risk portfolio. Although (due to long-term policies) it severely deteriorated the 2014 underwriting year results it may, nonetheless, add further pressure on the necessary recovery of the hull insurance market

IUMI says.

From 2016 to 2018, the hull sector faced few major losses with attritional losses accounting for an increasing share of the total claims costs. Income achieved during that period was not enough to cover these losses and there was no buffer to cover the major losses. In 2019, IUMI expects to see premiums increase, but from a very low base. This could mitigate the pressure on profitability but the return of major losses has the potential to offset this.

Furthermore, one of several ways to estimate the future claims potential of a certain portfolio is the use of detention data. According to recent analysis by the Nordic Association of Marine Insurers (Cefor), Astrid Seltmann showed a close correlation between the frequency and cost of claims and the level of related detentions.


Global premiums for the offshore energy sector amounted at USD 3.4 billion in 2018 representing a 3% decrease from 2017. It is worth noting that the 2017 number was a 5% reduction from 2016, with the 2016 number being a 21% reduction from 2015.

Most of the business in this sector is transacted in US dollars and so exchange rate fluctuations have very little impact. The fall in premium income has followed the slide in oil price but this seems to be flattening out.

Ongoing trade tensions make any sort of price rally less certain. High profile losses in this sector and nat-cat events (mainly hurricanes) have had little impact on the market

IUMI explains.

Continuing, the continuous downturn in activity is now reversing, with the sector rebalancing so as to operate within a lower oil price environment. Generally, there is an 18 month lag between improved oil prices and authorization for downstream expenditure, while reactivation will rise the risk of more claims.

Summing up, Philip Graham, Chair of IUMI’s Facts & Figures Committee, noted that marine underwriting sector is uncertain at the moment. At a macro-level this is created by political, economic and environmental factors. At an industry level it is because of accumulations, which represents a worrying and increasing incidence of major losses, and through a reactivation of the offshore sector.