Page 43 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΟΚΤΩΒΡΙΟΣ 2024

Currently, the marine insurance industry is in a relatively
good place. Our own statistics reporting on the 2023
underwriting year show that global insurance premiums
for cargo, hull, offshore energy, and liability (excluding
International Group P&I business) reached USD 38.9
billion, representing an uplift of 5.9% on the previous
year. Driving this was the continued growth in global
trade, a healthy oil price, and increases in vessel values.
The flip side of the equation is the amount we pay out in
claims. Despite some major losses, the impact of claims
has been relatively benign in recent years. This filters
down to our loss ratios or profitability. In general terms,
the loss ratio is the total of premiums earned less the
amount paid out in claims. To remain viable, an insur-
ance company needs to achieve technical break-even
(i.e., claims costs must not exceed premiums earned)
minus acquisition costs, capital costs, management
expenses, and other overheads. In 2023, we reported
positive and relatively stable loss ratios across all lines
of business.
Although this is good news, we are fully aware of some
significant headwinds to our business that have already
begun to make themselves known.
Perhaps the most impactful yet volatile driver of change
is the rise of geopolitical tensions across the world.
War risks, sanctions, and embargoes are increasing,
affecting traditional shipping routes and disrupting
international trade. The Russia-Ukraine war and the
situation in the Red Sea are obvious examples. However,
I am pleased to report that marine underwriters have
been able to provide continuous insurance cover, allow-
ing shipowners to continue operating in these regions
should they choose to do so. Around 50% of shipping
is now opting to avoid the Red Sea and take the longer
route around Africa. Marine insurers support this action
and are fully aware of the associated impact on crew,
the navigational challenges and, of course, the financial
and environmental concerns.
Sadly, sanctions have created the so-called “dark fleet”,
where several shipowner operate under the radar with-
out adequate insurance cover. This has the potential to
impact other vessels or the natural environment should
a collision or spill occur.
Changes are also affecting the evolution of global mar-
kets and their associated supply chains. Protectionism
is increasingly leading to the new trend of “nearshor-
ing”, i.e. goods being manufactured on the doorstep of
their purchasing base. Perhaps this heralds the end of
globalisation and a shrinking of the world. As underwrit-
ers, we are no longer free to write business anywhere
in the world and vessel and cargo owners are similarly
restricted as to the location in which they may place
their insurance. Trade restrictions might well lead to a
reduction in world trade and a consequent decrease in
marine insurance business.
Aside from this, society’s transition to a greener future
is poised to exert a significant influence on our busi-

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