IUMI released its 2022 global marine insurance market analysis, “IUMI Stats Report”, noting that building on the gains made in 2020, 2021 was another positive year for marine insurers.
or the third year, IUMI Stats contains analysis from its major claims database, which now comprises 11,000 claims records amounting to USD 17.3 billion of major losses.
According to the report, 2021 saw a robust macroeconomic recovery, but in 2022 worries about inflation and recession are gathering. For this reason, the International Monetary Fund (IMF) has lowered its global growth projection to 2.7%.
Furthermore, global marine insurance premiums in 2021 reached USD 33 billion, up 6.4% on 2020. Premiums have been lifted by increased global trade volumes, a stronger US dollar, increased offshore activity, higher vessel values and a reaction to deteriorating results in previous years. In fact, insurers in Europe and Asia, in particular.
Another positive indicator is the positive trend for the ocean hull business, which started in 2021, and continued into 2022. More specifically, premiums grew 4.1% in 2021, reaching USD 7.8 billion. There was continued rapid growth in the Nordic region and China, but much weaker in the UK (Lloyd’s) market, where the decline of recent years continued. The extraordinarily benign claims impacted both the frequency and the cost in recent years and could achieve the recovery of previous years’ adverse results.
Regarding the cargo market, it saw an increase in premiums for 2021 to USD 18.9 billion, driven by increased global trade volumes. Also, in this segment, claims impact was comparably benign in 2021 and loss ratios in most markets improved.
Finally, the offshore energy sector saw an increase in overall premiums, reaching USD 3.9 billion in 2021, representing a 6.9% increase in 2020. This is the second year of rise after six years of decline (2014 to 2019). The demand for offshore energy insurance typically tracks oil prices as projects become viable.
Historically, there is an 18-month time lag between improved oil prices, authorised offshore expenditure, and unit reactivation. Loss ratios kept in recent years a fragile balance with significant loss events being absent, but with a long backlog in claims reporting, the youngest years still have to mature. With the oil price rally in 2022, more activity and, thus, demand for offshore energy insurance may be expected.
Commenting on this year’s report, IUMI’s Secretary General, Lars Lange, said:
We are reporting this data at a time when several shocks have hit a world economy already weakened by the pandemic. Indicators in many economies now point to an extended period of subdued growth. Marine underwriters are navigating some highly complex issues