Analysis made by the International Union of Marine Insurance indicates that marine underwriting premiums for 2018 were recorded at $28.9 billion, representing a 1% rise from 2017.
With significant challenges facing the market, the IUMI believes this modest increase is not significant enough to herald an upturn in the fortunes of a marine insurance sector “characterised by uncertainty.”
“Changes to frame conditions are the most likely reason for the modest increase in premiums as opposed to any real market development,” explained Vice-Chair of IUMI’s Facts & Figures Committee, Astrid Seltmann.
“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.”
She added that ongoing global uncertainties, including the current tensions in trade, will continue to impact all sectors but specifically cargo and offshore energy.
Of the $28.9 billion global income, Europe accounted for 46.4%, Asia/Pacific 30.7%, Latin America 10.4%, North America 6.2%, and Other 6.3%.
Meanwhile 2018 saw Europe’s global share reduce from 49.2% in 2017 to 46.4% and Asia’s share increase from 29.2% to 30.7%.
For global marine premium by line of business, IUMI found that cargo continued to represent the largest share with 57.4% in 2018, hull 24.4%, offshore energy 11.4% and marine liability (excluding than IGP&I) 6.7%.
“Since the 2018 IUMI conference, we’ve seen around 20 entities cease or severely restrict their hull or cargo underwriting activities, added Philip Graham, Chair of IUMI’s Facts & Figures Committee.
“Whilst the modest growth in 2018 global marine underwriting premiums recorded this year is, of course, welcome it does not demonstrate any significant uplift to the current market and is more likely to have been driven by economic factors.”
That said, Graham was hopeful that 2019 will bring more positivity, with the hull and cargo markets appearing to have bottomed-out and prompt a modest uplift, albeit from a low base.
“Profitability is likely to be pressured by the recent return of major losses, however. More activity in the offshore energy markets is also good news, but reactivation of units adds to the overall risk profile,” he added.
“At a macro-level this is created by political, economic and environmental factors; and at an industry level it is due to accumulations, a worrying and increasing incidence of major losses; and through a reactivation of the offshore sector.”
