Global marine insurance premium income increased 5.5% last year to $US42.6 billion ($60.3 billion) but more capacity is increasing competition, according to the industry’s latest market analysis. 

Transport/cargo remained the largest business line, accounting for 57% of global premiums, the International Union of Marine Insurance (IUMI) said at its annual conference in Rotterdam. 

That was followed by ocean hull at 24.7%, offshore energy at 11.1% and marine liability, excluding P&I business covered by the International Group of P&I clubs, at 7.3%. 

Chief analyst Veith Huesmann said the increase in premium income was “heavily supported” by exchange rate impacts resulting from US dollar weakness. 

“Once currency effects are taken into account, the market remains soft across all major business lines, with increased capacity adding to competitive pressure in most sectors,” he said. 

The claims environment has remained relatively stable, with no catastrophic loss significantly affecting any sector, but attritional losses continue to build and are eroding profitability, particularly in ocean hull, he says. 

IUMI President Frederic Denefle told the conference marine is entering a period of significant change driven by geopolitics, new trade routes, digitalisation and the lower-carbon transition. 

“US trade tariffs haven’t caused the disruptions we feared, and the world economy was more resilient than anticipated,” he said. 

“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.” 

Mr Denefle told a workshop that there’s a misconception that war cover is automatically cancelled when a conflict situation arises. 

“When risk increases significantly, some insurers will serve a notice of cancellation in relation to the cover their assureds have in place,” he said. “This enables the insurer to reassess the risk and then reinstate the cover on adjusted terms.” 

IUMI Vice-President Sean Dalton is taking over as president from Mr Denefle, who has completed a four-year term.