Global cargo premiums for 2023 have risen to US$ 22.1 billion, marking a 6.2% increase compared to the previous year, according to Mike Brews, Chair of the IUMI Cargo Committee, who spoke at the International Union of Marine Insurance (IUMI) annual conference in Berlin. This uptick highlights a sustained improvement in the marine insurance sector.

Brews also reported that cargo loss ratios (the total of premiums earned less the amount paid out in claims) have improved across many regions. Traditionally, these ratios tend to increase over time; however, the starting point for 2023 was notably lower than in previous years. The combination of lower loss ratios and stable claims has created a positive environment for cargo underwriters, IUMI said.

“In general, the cargo market is healthy and in a good place”, said Mike Brews, “we appear to be in a good part of the cycle. Losses have improved over the past five years with major losses down year-on-year. It appears that carriers and operators are focusing much more on loss prevention which is good for all concerned, particularly those serving at sea.”

However, Brews highlighted a number of areas which require careful monitoring, notably the change in global weather patterns. IUMI said that major storms were becoming a concern for all insurance classes but with marine bearing the brunt. Marine cargo losses due to extreme weather events were no longer localised and resultant losses were starting to increase – this included static and in-transit cargoes. Similarly, containers lost at sea were also on the rise. International conflict continued to be a concern with cargoes being affected as they transit high-risk areas such as the Red Sea and the Russia/Ukraine war zone. Hijackings were also reported to be on the increase globally. IUMI added that accumulation of risk on single vessels or in ports or other shoreside facilities continued to be an issue but that underwriters were more aware of it.

“Multiple consignments will always gather in single locations and ever-larger vessels will always carry large high-value cargoes. But today, the market is much more aware of stocks and values and is cognisant of the potential risk. Our knowledge of the issue is so much better and so we can take steps to mitigate that particular risk”.

“Today, insurance companies are paying more attention to their marine business than in recent years. Although marine is usually a small part of the overall portfolio, losses can be significant. Underwriting discipline is improving and companies are focusing on their loss ratios and not chasing business based on premiums alone. This is good news and, as a result, the market appears to be moving in a positive direction”.

During 2024, IUMI has been widening its work with IMO and has been involved in a number of IMO working groups with a strong focus on ship safety. With ship fires still trending up, IUMI is supporting improved fire detection and a change to SOLAS so that fixed water monitors will be a mandatory requirement for newbuild container ships. This would be a material step forward in improved fire protection on future container ships since, currently, firefighting efforts are confined to portable water monitors and mist lances. IUMI is also participating in the TopTier Joint Industry Project, which is developing several recommendations to address the complex root causes of containers lost overboard which will be discussed at the IMO Sub-Committee on Carriage of Cargoes and Containers.

Global cargo premiums for 2023 have risen to US$ 22.1 billion, marking a 6.2% increase compared to the previous year, according to Mike Brews, Chair of the IUMI Cargo Committee, who spoke at the International Union of Marine Insurance (IUMI) annual conference in Berlin. This uptick highlights a sustained improvement in the marine insurance sector.

Brews also reported that cargo loss ratios (the total of premiums earned less the amount paid out in claims) have improved across many regions. Traditionally, these ratios tend to increase over time; however, the starting point for 2023 was notably lower than in previous years. The combination of lower loss ratios and stable claims has created a positive environment for cargo underwriters, IUMI said.

“In general, the cargo market is healthy and in a good place”, said Mike Brews, “we appear to be in a good part of the cycle. Losses have improved over the past five years with major losses down year-on-year. It appears that carriers and operators are focusing much more on loss prevention which is good for all concerned, particularly those serving at sea.”

However, Brews highlighted a number of areas which require careful monitoring, notably the change in global weather patterns. IUMI said that major storms were becoming a concern for all insurance classes but with marine bearing the brunt. Marine cargo losses due to extreme weather events were no longer localised and resultant losses were starting to increase – this included static and in-transit cargoes. Similarly, containers lost at sea were also on the rise. International conflict continued to be a concern with cargoes being affected as they transit high-risk areas such as the Red Sea and the Russia/Ukraine war zone. Hijackings were also reported to be on the increase globally. IUMI added that accumulation of risk on single vessels or in ports or other shoreside facilities continued to be an issue but that underwriters were more aware of it.

“Multiple consignments will always gather in single locations and ever-larger vessels will always carry large high-value cargoes. But today, the market is much more aware of stocks and values and is cognisant of the potential risk. Our knowledge of the issue is so much better and so we can take steps to mitigate that particular risk”.

“Today, insurance companies are paying more attention to their marine business than in recent years. Although marine is usually a small part of the overall portfolio, losses can be significant. Underwriting discipline is improving and companies are focusing on their loss ratios and not chasing business based on premiums alone. This is good news and, as a result, the market appears to be moving in a positive direction”.

During 2024, IUMI has been widening its work with IMO and has been involved in a number of IMO working groups with a strong focus on ship safety. With ship fires still trending up, IUMI is supporting improved fire detection and a change to SOLAS so that fixed water monitors will be a mandatory requirement for newbuild container ships. This would be a material step forward in improved fire protection on future container ships since, currently, firefighting efforts are confined to portable water monitors and mist lances. IUMI is also participating in the TopTier Joint Industry Project, which is developing several recommendations to address the complex root causes of containers lost overboard which will be discussed at the IMO Sub-Committee on Carriage of Cargoes and Containers.