The International Union of Marine Insurance (IUMI) has noted a modest recovery in the marine re/insurance market during the 2019 underwriting year, but warns that the future of the market remains uncertain due to the COVID-19 pandemic.
IUMI estimates that marine underwriting premiums totalled $28.7 billion in 2019, representing a 0.9% reduction from 2018.
Geographically, Europe accounted for 46.3% of total premiums, followed by Asia Pacific at 31.8%, Latin America at 10.3%, and North America at 5.3%.
Over 2019, Europe’s global share reduced slightly from 46.4%, while Asia’s share increased modestly from 30.7%
For global marine premium by line of business, cargo continued to represent the largest share with 57.5% in 2019, hull 24.1%, offshore energy 11.7% and marine liability 6.8%.
However, Philip Graham, Chair of IUMI’s Facts & Figures Committee, warned that this data does not account for the effects that the COVID-19 pandemic will have on the marine market this year.
“Clearly there is a lag between IUMI’s reported 2019 numbers and the effect that COVID is having on the marine insurance markets,” he said
“The loss ratio figures as of 2019 suggest the start of a modest recovery in the hull and cargo segments and a continued fragile balance in the energy segment, but it is still early days and it remains to be seen how far COVID-19 will impact these trends going forward.”
One consequence of COVID is that people are travelling less and buying less, which has translated into fewer claims as certain vessels classes have seen less use.
“While this is good for underwriters in the short-term, we should be wary of a return to normality as utilisation begins to increase,” Graham cautioned.
IUMI notes that different market sectors have reacted differently to COVID-19, with significant impacts for cruise and offshore, as well as the containership sector.
But other markets, such as crude oil tankers, have fared much better, particularly from the demand for floating storage.
Vice-Chair of IUMI’s Facts & Figures Committee, Astrid Seltmann, also commented: “Cargo and hull results started to recover somewhat in 2019 but from a very low – and for the hull market, unsustainably low – level.”
“With the arrival of COVID-19 and the related changes coming in with full force from the Q2 2020, the degree of uncertainty surrounding the future of marine underwriting has increased considerably again,” Seltmann continued.
“However, as marine insurance is all about handling risk, the industry is confident to deal with these additional challenges in a professional way.”