During the IUMI conference in Cape Town, Chair of the Ocean Hull Committee, Mark Edmondson, stressed a continuing deterioration of premium income against the more positive picture of an improving risk profile.
Nevertheless, the international market has improved during 2018, despite the fact that continuing volatility and uncertainty in many sectors remained a concern.
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Mr. Edmondson estimates that about USD100 million of capacity has been removed from the market over the past year, because of very low start-up activity and the withdrawal of a number of high profile hull insurers.
In addition, facilitisation is under increasing pressure, as it experiences worse performance and more regulatory scrutiny.
Overall the deterioration of underwriting results, over what has been a considerable period, has appeared to have triggered a brake in the decline in market conditions.
Another positive is the fact that an enhanced risk profile caused by better quality tonnage and greater regulatory influence, has driven consistent improvement in the frequency of major casualty. However, the ocean hull market is still being hit by lower asset values, reduced utilisations, year-on-year erosion of premiums and constant volatility.
Finally, the sector is coming to terms with the potential impact of:
- Cyber exposure;
- Incoming environmental regulations and their impact on hardware and operations;
- Autonomous vessels;
- Bunker contamination;
- Accumulation of risks that quickly build as containership continue to grow both in size and capacity.
