Tagged: insurers, losses, recession, soft market, underwriting

Despite some dire predictions from certain quarters of the market over the last year or so, marine insurers have yet again celebrated a good year with reports of healthy profits coming in from many underwriters.

Whilst the harsh realities of the global economic downturn have struck the shipping and trading industries, the predicted knock-on effects on the marine insurance sector have generally not materialised.

The marine insurance market is alive and well; there has been no noticeable hardening and in some cases the cargo market has softened slightly.  Far from a decline in business, many insurers – notably Lloyd’s syndicates – have seen an increase in gross written premiums.

According to IUMI, total losses have, on the whole, followed a downward trend over the last 30 years.  Whilst the costs of some claims have increased, repair costs for damaged vessels have largely fallen, and with fewer ships in service losses have been muted. There have been some increased cargo losses in particular areas and circumstances, but on the whole the claims environment has been relatively benign.

Moreover, there has been ongoing investment into marine underwriting in many parts of the world.  Cargo in particular continues to be one of the most favoured lines for general insurers, and many companies have invested further in their marine teams even during the recession.

Will the market change move in the medium-term? The FP Marine Risks Crystal Ball predicts little, if any, change over the next six months.  We expect that rates will remain at current levels, or possibly even drift a little lower in some areas – particularly cargo.

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