The International Union of Marine Insurance (IUMI) has published its Global Stats report for 2024, providing an analysis of the global marine insurance market.
Overview of the 2023 insurance year
The 2023 insurance year was positive for marine underwriters with market development across all lines of business. Global trade continued to grow, positively impacting the premium base, particularly for cargo insurance. The oil price appeared stable, benefiting the offshore sector. Inflationary pressure eased, and many central banks began cutting interest rates, although vessel repair costs remained largely unaffected, IUMI finds.
Apart from some inflation-driven increases in hull repair costs, the claims environment remained moderate, with no major weather events or vessel casualties significantly affecting overall costs. However, fires on large vessels, particularly containerships and car carriers, continued to concern hull and cargo insurers.
Premiums by sector
- Ocean hull premiums reached USD 9.2 billion, a 7.6% increase from the previous year. More activity, rising vessel values, and reduced market capacity contributed to the growth. Loss ratios remained positive across regions, although inflation affected repair costs. Large vessel fires continued to be a major concern.
- Cargo insurance premiums totalled USD 22.1 billion, reflecting a 6.2% rise. Market development in this sector was driven by healthy global trade growth, with loss ratios starting at their lowest point since 2017.
- Offshore energy premiums reached USD 4.6 billion, up 4.6%, driven by increased oil prices. Despite higher activity, claims remained stable with positive loss ratios, although starting from a higher base than in previous years. Claims costs typically take several years to fully develop.
Geopolitical headwinds and future concerns
According to IUMI, increasing geopolitical tensions are creating challenges for the marine industry, with no signs of easing in 2024 or beyond. The ongoing Houthi attacks in the Red Sea and the Russia/Ukraine war are disrupting traditional shipping routes, forcing carriers to adapt. Other potential challenges for 2024 include the US election, climate change and related extreme weather events, zero-carbon fuel technology, and cyber risks. Despite these, the marine insurance market performed well in 2023.
Global marine insurance premiums and economic factors
In 2023, global marine insurance premiums reached USD 38.9 billion, a 5.9% increase from 2022. This growth was seen across all lines of business, driven by rising global trade volumes and values (cargo), increases in vessel values (hull), and the higher oil price encouraging more offshore energy activity. The global economy is stabilizing post-pandemic, with inflation under control and interest rates falling, leading to predicted growth in larger economies. Seaborne trade continues to recover despite changing patterns due to international conflicts.
Vessel trends
World fleet growth has stabilised, with fewer new deliveries and less scrapping, resulting in an increase in the average age of vessels. China has now firmly established itself as the largest ship-owning nation globally. Vessel earnings for 2024 are softening but remain above 2023 averages.
