Marine insurance grows 5.9% in 2023, reaching US$38.9 billion in premiums

Marine insurance grows 5.9% in 2023, reaching US$38.9 billion in premiums | Insurance Business New Zealand

Marine

Marine insurance grows 5.9% in 2023, reaching US$38.9 billion in premiums

Global growth driven by increased trade, vessel values, and higher oil prices

Marine

By
Kenneth Araullo

The International Union of Marine Insurance (IUMI) released its 2024 analysis of the global marine insurance market through its annual IUMI Stats Report.

This report provides insights into the health of the marine insurance sector, considering factors such as global economic trends, trade, and shipping. Data for the report is sourced from IUMI and various external agencies, with analysis and commentary provided.

In 2023, global marine insurance premiums reached $38.9 billion, marking a 5.9% increase from 2022. Growth was observed across all business lines, driven by a rise in global trade volumes and values, increased vessel values in the hull sector, and higher oil prices boosting activity in the offshore energy industry.

Ocean hull premiums totaled $9.2 billion, a 7.6% increase from the previous year. This growth was attributed to increased vessel activity, higher vessel values, and reduced market capacity.

Despite low claims and favorable loss ratios in all regions, 2023 saw some deterioration in loss ratios, which can be linked to inflation impacting repair costs. Fires on large vessels continued to be a concern.

Cargo insurance premiums rose to $22.1 billion, up 6.2% from the previous year. This increase reflects continued market development and global trade growth. Loss ratios in the cargo sector were positive and started at their lowest levels since 2017.

The offshore energy sector reported $4.6 billion in premiums for 2023, a 4.6% increase. This was driven by rising oil prices and increased activity, though this has not yet led to a significant rise in claims. Loss ratios remained positive but started from a higher point than in previous years, and claims costs are expected to take several years to fully develop.

The report also includes an update on IUMI’s Major Claims Database, which has been collecting data since 2013. Contributions come from 28 national insurance associations, with 6,400 cargo-related observations representing $10.9 billion in losses and 10,300 hull-related observations amounting to $14.6 billion in cumulative losses. The data is analyzed by loss severity, frequency, location, and cause.

IUMI secretary general Lars Lange (pictured above) noted that 2023 saw positive market development across all lines of marine insurance.

“Looking ahead, there are a number of headwinds likely to make themselves known this year and beyond. Geopolitical tensions and the continuing attacks in the Red Sea area and the Russia/Ukraine war are significant. Our transition to a cleaner and greener society will also impact heavily as will the continuing – and often tragic – increase in large vessel fires,” Lange said.

IUMI will continue to monitor the challenges facing the marine insurance sector and collaborate with relevant agencies to ensure underwriters are informed and equipped to meet the evolving needs of global trade.

Lange also acknowledged the work of IUMI’s Facts & Figures Committee and its data partners in compiling the Stats Report and Major Claims Database.

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