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The global marine insurance market remains stable even as the sector enters a major transition phase driven by geopolitics, new trade routes, digitalization, and the shipping industry’s move towards decarbonization
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International Union of Marine Insurance president Frédéric Denèfle said the overall market is performing well in terms of premium growth as well as the provision of coverage
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At the same time, he warned that insurers must remain alert to all the factors are reshaping global trade and the risks involved
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With digital advancements, the marine insurance sector may soon offer fully digitized and standardized global cargo insurance certificates
The global marine insurance market remains stable even as the sector enters a major transition phase driven by geopolitics, new trade routes, digitalization, and the shipping industry’s move towards decarbonization.
International Union of Marine Insurance (IUMI) president Frédéric Denèfle, speaking at the opening of this year’s IUMI annual conference in Rotterdam on September 20-23, said the overall market is performing well in terms of premium growth as well as the provision of coverage, but at the same time warned that insurers must remain alert to the different factors reshaping global trade and the risks they bring.
“The hull and cargo markets have shown growth in terms of premium income, although the offshore energy sector remains relatively subdued,” said Denèfle. “US trade tariffs haven’t caused the disruptions we feared, and the world economy was more resilient than anticipated. But there is considerable uncertainty from increasing war risks, additional capacity bringing greater competition and continued inflationary pressure. This is coupled with ongoing uncertainty around free trade and global commerce.”
READ: Cargo continues to dominate global marine insurance premiums
In the face of these challenges, Denèfle highlighted the ability of marine insurers to continue providing cover in all of the world’s higher-risk regions, and the importance of ensuring that they will be able to continue doing so as the trade landscape changes.
“As insurers, we must be prepared to insure tomorrow’s trades and trade routes, including those being introduced to avoid areas of tension and conflict,” he said. “We also need to understand the new markets that will inevitably emerge as a result of geopolitical developments.”
READ: Global shipping org BIMCO says Trump’s insurance offer unclear
Towards green shipping
Denèfle also underscored the important role of that marine insurers in supporting the shift towards low-carbon shipping
“Insurers must take a leading position on the decarbonisation of shipping, despite the hiccups we have experienced so far on this journey,” he said.
READ: Shipping forges on with decarbonization even without approved net zero framework
Meanwhile, technological advancements such as on data standards, system digitalization, and artificial intelligence (AI) are becoming more influential in the marine insurance sector.
“I see a day, not too far in the future, when our sector will be able to offer fully digitised and standardised global cargo insurance certificates that meet the requirements of financial institutions and our customers,” Denèfle said.
“AI is going to change how we operate. It will make us smarter and more efficient, and we will need to embrace and adopt this new technology wholeheartedly,” he added. “Despite all this change, our sector remains strong, agile and ready to adapt.”
IUMI is a global body representing national and international maritime insurers and reinsurers. It currently has 41 member associations across all continents. It is involved in advocacy, policy setting, education, and market analysis.
