All lines of insurance business hit a top of US$35.8 billion in the last calendar year, the International Union of Marine Insurance has revealed int its latest analysis.
Global income by region was Europe 47.7%, Asia/Pacific 28.4%, Latin America 10.3%, North America 8.5%, and Other 5.1%.
The biggest share of business was transport / cargo at 57.35, followed by global hull at 23.4%. Marine liability (non-P&I) was 7.7%.
Astrid Seltmann, Vice-Chair of IUMI’s Facts & Figures Committee commented:
“Marine underwriters have suffered poor returns over several years but from 2020 results started to improve. 2021 and particularly 2022 have shown a relatively strong growth in the global premium base across all lines of business. In combination with a benign claims impact, this has translated into a much better performance in terms of loss ratios, specifically for hull and cargo. The reasons are complex but are likely due to the post-pandemic rebound in global trade coupled with reduced market capacity, particularly for hull. We’ve seen a continued strong performance from Europe after many years of decline but, while still increasing, Asian market growth appears to be slowing. But overall, the general trend for global premiums continues to be upwards. For sustainability, claims trends need to be monitored, being coupled with vessel activity, value accumulation, nat-cat impact, the use of new technology and inflation impact on repair costs. In addition, fires continued to be a concern in 2022 and also into 2023.”
Cargo insurance
This sub-sector returned US20.5b in 2022, which represents 8.3% growth on the previous year. All regions experienced growth, although there were slower rates of growth in the Asia-Pacific region because of economic conditions and Asian currencies weakening against the US dollar. IUMI warned that, because of exchange rate fluctuations, comparisons with earlier years are inexact.
IUMI noted that cargo premiums have demonstrated positive market developments over recent year and tend to follow trends in world trade.
Cargo underwriters add that they continue to be concerned with persistent challenges including mis-declared cargoes, vessel fires, accumulation of risk in single locations, climate change, and political tensions.
Ocean hull
Global hull premiums increased by 5.7% to reach US$8.4b billion. All regions bar Latin America recorded growth. IUMI noted that the last calendar year saw an increase in the size and value of the world fleet, and this has positively affected premiums. Claims frequency has been on a long-term downward trend but has shown signs of increase after the dip in 2020. Major losses were moderate with the exception of fires.
Summing up new risks
Jun Lin, Chair of IUMI’s Facts & Figures Committee provided an overview of the new risks.
“we shouldn’t lose sight of future challenges that are likely to inject a degree of uncertainty into all our lines of business. Asset prices continue to rise and inflationary pressure will only add to the value of claims. The oil price is fluctuating and global trade forecasts vary. Trade routes are changing, not least as a result of the war in Ukraine which, itself, is changing the political landscape. New cargoes such as lithium-ion batteries are creating new risks that must be fully understood and mitigated, as are new propulsion technologies resulting from our combined environmental protection ambitions. And, of course, climate change and new weather events are also making themselves known to insurers. Added to this, we are managing new types of risk such as cyber and having to deal with the accumulation of risk as cargo of increasing value is being stored in single port facilities or is being carried on vessels that continue to grow in capacity”.
