A “sustained improvement,” has been reported in the global marine cargo insurance market, according to Mike Brews, chair of the International Union of Marine Insurance.
Speaking at the IUMI’s international conference earlier this week, Mr Brews commented that, “in general, the cargo market is healthy and in a good place… we appear to be in a good part of the cycle. Losses have improved over the past five years with major losses down year-on-year. It appears that carriers and operators are focusing much more on loss prevention which is good for all concerned, particularly those serving at sea.”
Global cargo premiums for 2023 were USD 22.1 billion representing a 6.2% increase on the previous year, the IUMI reported, adding that the increase demonstrated a positive market development that has been sustained for a number of consecutive years.
Similarly, cargo loss ratios (the total of premiums earned less the amount paid out in claims) were improving across many regions, IUMI commented, adding that, loss ratios tend to develop (i.e. increase) over time but the starting point for 2023 was significantly lower than in previous years. This, coupled with relatively low and stable claims, has created a positive environment for cargo underwriters, the IUMI noted.
However, a note of warning was also sounded.
International conflict was said to be a concern, with reference made to the Red Sea and to the Russia / Ukraine war. Hijackings were also note to be on the rise globally.
Another area giving rise to concern is the change in global weather patterns, with the marine industry said to be bearing the brunt of major storms. Marine cargo losses because of extreme weather is no longer localised and “resultant losses are starting to increase”.
“Today, insurance companies are paying more attention to their marine business than in recent years. Although marine is usually a small part of the overall portfolio, losses can be significant,” Mr Brews said.
