Francesco Dubbioso, Country Manager Italy and Head of Marine Technical Underwriting Europe, Alta Signa
Here at Alta Signa we were interested to digest the latest International Union of Marine Insurance (IUMI) Global Marine Insurance Report, presented at IUMI's 150th annual conference in Berlin, which highlights a strong recovery and positive trends across the global marine insurance market in 2023. The report notes an overall increase in premiums driven by rising global trade volumes, higher vessel values, and stable conditions in the offshore energy sector. Key segments such as ocean hull and cargo insurance have shown significant growth, with Europe leading the market share in these areas.
Despite ongoing challenges, including geopolitical tensions and evolving risks from larger vessels and changes in shipping routes, the marine insurance market has demonstrated resilience and adaptability. We agree with the report’s finding that this sets a promising outlook for the future, as underwriters continue to navigate a dynamic environment with a proactive approach to risk management.
Here are our key takeaways from the report, focusing specifically on the hull and cargo sectors in the European market:
- Hull Insurance in the EU: The European hull insurance market continues to show resilience, with gross premiums estimated at USD 8.4 billion in 2023, reflecting a 5.7% increase from the previous year. The EU accounts for a significant portion of this market. Loss ratios have improved, with recent figures showing a reduction to around 61%, down from 68% in 2017, indicating better underwriting practices and claims management. The market is also addressing challenges such as climate change impacts, increased vessel values, and stricter ESG compliance, which are reshaping risk assessment and underwriting strategies.
- Cargo Insurance Performance in Europe: The EU cargo insurance sector maintains strong performance, contributing significantly to the global total of USD 38.9 billion in marine premiums in 2023, a 5.9% increase from 2022. The cargo insurance loss ratio in Europe remains favourable at approximately 30%, which is significantly better than the global average of 56.8%. European cargo insurers benefit from a stable regulatory environment and a focused approach on selective underwriting, which helps in maintaining low loss ratios despite the increasing frequency of severe weather events and other global risks.
- Market Recovery and Growth in the EU: The European hull and cargo insurance sectors have demonstrated notable recovery and growth, with combined gross written premiums (GWP) reaching €2.54 million in the first half of 2024, achieving 37.4% of the annual target. Hull insurance premiums have grown at an annual rate of about 6.1% from 2021 to 2028, driven by improved risk selection and market demand. For cargo insurance, the EU market continues to expand, with projections suggesting it will reach a substantial portion of the expected USD 106 billion globally by 2032, supported by a CAGR of 4.1%.
Global trade is driving growth
The 2023 IUMI Global Marine Insurance Report paints a positive picture for marine insurance, with growth across all major lines, particularly in hull and cargo segments. This recovery, driven by factors like increased global trade volumes, rising vessel values, and stable oil prices, highlights the market's resilience. However, the evolving risk landscape—marked by geopolitical tensions, technological shifts, and changing shipping routes—presents both challenges and opportunities for underwriters. Looking ahead, while the marine insurance industry faces headwinds from geopolitical and environmental changes, it remains well-positioned to adapt and thrive, continuing to meet the complex needs of the global maritime sector with a proactive and resilient approach​.
Loss mitigation and risk management remain critical in our market, especially as we navigate the challenges posed by large loss events. Incidents such as the Baltimore bridge accident, which is still under investigation, including its financial impact on Protection & Indemnity (P&I) insurance, underscore the importance of proactive loss prevention strategies and wordings that avoid systemic impacts. These events have a direct impact on reinsurance pools and the wider market, emphasising the need for underwriters to stay ahead of evolving risks. At Alta Signa, we are committed to implementing robust risk management frameworks to help mitigate such exposures, ensuring the sustainability and resilience of the marine insurance sector.
Our main focus is leveraging these positive market dynamics to continue to grow our hull and cargo market share, based on the excellent reputation we have developed since the launch of our marine division. By prioritising a deep understanding of local markets and tailoring our offerings to meet specific client needs, backed by in-house claims expertise, we are proud to be differentiating ourselves as leaders in marine insurance, setting the stage for sustained growth and competitive advantage in the evolving landscape.