Global marine insurance premiums rise by 1%

According to the International Union of Marine Insurance (IUMI), marine underwriting premiums for 2018 were recorded at USD 28.9 billion which represents a single percentage point rise from 2017.

The USD 28.9 billion global income was split between these geographic regions: Europe 46.4%, Asia/Pacific 30.7%, Latin America 10.4%, North America 6.2%, Other 6.3%.

2018 saw Europe’s global share reduce from 49.2% (2017) to 46.4% and Asia’s share increase from 29.2% (2017) to 30.7%.

With significant challenges facing the market, the modest increase of the 1% premium is not significant to herald an upturn in the fortunes of the marine insurance sector.

Philip Graham, Chair of IUMI’s Facts & Figures Committee said that this does not demonstrate any significant uplift to the current market and is more likely to have been driven by economic factors.

Vice-Chair of IUMI’s Facts & Figures Committee, Astrid Seltmann said: “A continuing growth in world trade will have driven cargo premiums up by 2.5%; and the fluctuating oil price will be pressurising premiums from the offshore energy sector which dropped by 3% in 2018.

“Ongoing global uncertainties, including the current tensions in trade, will continue to impact all sectors but specifically cargo and offshore energy.

“The continued downward adjusting of global trade growth is not helpful for marine cargo underwriting going forward.

High levels of technical losses continue to blight all sectors, particularly hull and cargo, and 2018 will not be any different.

“A normalization of major losses after several relatively benign years is likely to offset any rise in premiums achieved this year.

“Premiums had already plummeted to truly unsustainable levels in 2017 and so any increase begins from a very low base.

“Only when the 2019 statistics become available will we understand to what degree marine underwriting might have returned to profitability.

“A particular concern is the increase in the frequency of fires on containerships, particularly those starting in the cargo area of vessels such as the Mærsk Honam or the Grande America.

“This trend has been observed for some years and the newest statistics show a clear further increase in 2019.

“These fires pose a threat to the crew and cause severe damage to both vessel and cargo.

“IUMI is working with a range of industry bodies to improve the prevention of such events as well as fire-fighting capabilities onboard.”

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