We have reached the end of the globalisation process: IUMI president

How Changes Around the World Are Shaping Marine Insurance

This week, the International Union of Marine Insurance (IUMI) held its annual conference in Berlin. The president, Frédéric Denèfle, talked about the big changes affecting marine insurance. These changes are happening because of issues like wars, sanctions, and other global events that are making things tough for shipping businesses.

Denèfle explained that one of the biggest challenges is the rising geopolitical tensions. With more wars and political conflicts, some countries are putting sanctions and embargoes on others. This is causing problems for ships that are trying to deliver goods. Some ships now have to take longer routes around Africa to avoid risky areas. But these longer trips are expensive and could harm the environment. Denèfle also raised concerns about whether the ships and their crews are ready to handle the tough conditions on these longer routes.

He also talked about how the way goods are shipped is changing. As the global economy evolves, shipping companies might need to adjust the way they move cargo. This could involve new logistics systems and even a shift toward “nearshoring,” where companies bring production closer to home. All of this will likely have a big impact on how ships are operated in the future.

IUMI calls for industry-wide cooperation and knowledge sharing as shipowners move toward net-zero

Another important issue discussed was the environment. The shipping industry is working hard to reduce its negative impact on the planet. New kinds of fuel, new ship designs, and stricter regulations are being introduced. Denèfle specifically mentioned the European Union’s new Emissions Trading System, which became law earlier this year. This new rule is pushing the shipping industry to lower its greenhouse gas emissions.

Denèfle believes these changes are part of a bigger trend. He said that the world is moving away from the period of global expansion that started after World War II. For a long time, marine insurers could do business anywhere in the world, and ship owners could choose their insurance providers from nearly any country. But now, restrictions are becoming more common. As a result, there may be fewer shipments, and marine insurance companies might see their premiums drop.

At the conference, IUMI officials also shared their findings on the latest trends in marine insurance. In 2023, the global marine insurance premium base reached $38.9 billion, which is a 5.9% increase compared to the previous year. Growth was seen across all sectors. Offshore energy insurance went up by 4.6%, cargo insurance rose by 6.2%, and ocean hull insurance increased by 7.6%.

In conclusion, the marine insurance industry is facing a lot of changes. Whether it’s dealing with political risks, environmental regulations, or new ways of shipping goods, the industry will need to adapt to these shifts. Denèfle and other experts at the conference agree that the future of marine insurance will depend on how well the industry handles these challenges.