• 2019 September 17 11:00

    Marine cargo market characterised by “accelerating change” as underwriters take action to address continuing unprofitability, says IUMI

    Speaking at IUMI (International Union of Marine Insurance) annual conference in Toronto, Canada, Sean Dalton, Chair of IUMI’s Cargo Committee reported a 2.5% increase in 2018 global premiums to USD 16.6 billion. However, the increase was largely attributable to growth in global trade and exchange rate fluctuations.

    Dalton characterised the marine cargo market as being in a state of “accelerating change” driven by underwriters taking action to address unprofitable results and to improve performance.

     He explained: “on a global basis, the cargo line is unprofitable and has been for a number of years. Premiums have not been technically adequate to cover losses and expenses and, as such, have not delivered an acceptable return for capital providers. A significant reason for this ongoing situation is the commoditization of this speciality line of business which has lowered entry barriers and attracted new entrants, some of whom are now exiting.

     As result, underwriters are addressing their portfolios with urgency and reviewing technical rate adequacy, expenses, terms and conditions, deductible levels, and capacity/limit deployment. A greater focus has been placed on commitment to business, stability and capabilities to ensure underwriters deliver a stable offering that can be robustly delivered.”

    World trade global growth is expected to achieve 2.6% in 2019 and 3% in 2020. This, coupled with governments in emerging markets investing in infrastructure and promoting domestic manufacturing, gives a positive outlook for cargo insurance. However, weaker economic projections and concerns over trade wars may dampen expected growth and are of concern.

    Already, 2019 has been impacted by nine major cargo vessel fires which, tragically, have resulted in loss of life, injury and environmental damage. Misdeclaration of cargo appears to be the main culprit and is driving some shipping companies to take the unprecedented step of announcing significant fines to those responsible.

    Ashore, there have been cargo storage losses in 2017 and 2018 from nat-cat incidents as well as a number of significant fire losses over the past 12 months. The marine cargo market insures a significant amount of property contents storage under Warehouse/Storage Endorsements and “Stock Thru Put” policies. The current soft market has increased this risk profile as underwriters have been offering broader terms, higher nat-cat limits, lower deductibles and more competitive prices than their property counterparts would provide.

     Dalton concludes: “In addressing these issues, cargo insurers are encountering old and new challenges. These include compliance, sanctions, War and SR&CC, emerging risks and new coverage requirements. With each cargo insured loss there are related uninsured losses. These might include business interruption due to supply chain issues, trade disruption, or loss of market. Emerging technologies may provide tools and capabilities to enable the development of new products. To meet these needs cargo underwriters must get the basics right if they are to be in a position to capitalize on future opportunities. It is certain that exposures will continue to increase in size and complexity for the cargo underwriter and this will require a sustainable approach to the business to meet the demands of the present and the future”.
     
    About IUMI

    The International Union of Marine Insurance (IUMI) represents 43 national and marine market insurance and reinsurance associations. Operating at the forefront of marine risk, it gives a unified voice to the global marine insurance market through effective representation and lobbying activities. As a forum for the exchange of ideas and best practice, IUMI works to raise standards across the industry and provides opportunities for education and the collection and publication of industry statistics. IUMI is headquartered in Hamburg and traces its roots back to 1874.




2020 August 10

09:06 Baltic Dry Index as of Aug 7
08:58 MABUX: Bunker market this morning, Aug10

2020 August 9

16:21 MPA launches six next-generation patrol craft to grow its frontline capabilities
15:35 Fincantieri Bay Shipbuilding prepares for Navy frigate work
14:03 NCLH reports Q2, 2020 financial results
13:27 USCG Cutter Legare offloads nearly 5,000 lbs. of cocaine, marijuana
12:49 ACBL names Mike Ellis as new CEO
11:17 POAL and ship’s master fined $432,400 for excessive speed

2020 August 8

15:32 NOAA, U.S. Navy will increase nation’s unmanned maritime systems operations
14:31 Sanmars Sirapinar commences operations in Baltic Sea
13:42 USCG accepts newest fast response cutter
12:03 SCHOTTEL propulsion for first-class expedition cruise vessels
11:18 Australia’s new icebreaker on the move

2020 August 7

18:32 Maersk revamps Europe to Middle East & Indian Subcontinent network
18:00 Rosmorport's to beef up its icebreaking fleet to 38 units in 2020
17:00 World’s first zero-emissions top handlers performing well at Port of Los Angeles
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15:09 Launching of Russia’s first LNG-powered passenger ship Chaika held at Zelenodolsk Shipyard
14:21 North Carolina Ports records year-over-year increases in Fiscal Year 2020
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13:21 ABP invests in Port of Lowestoft to support UK Southern North Sea energy sector
13:19 Krasnoye Sormovo Shipyard hosts launching ceremony for the RSD59 series MS Pola Marina
12:49 Rosmorport plans expansion of its fleet by 24 newbuilds
12:08 Jan De Nul signs contract with Dogger Bank Wind Farm
11:22 The second tanker manufactured in Azerbaijan launched for the next stage of construction
10:37 MSC’s Golden Horn service links China, Korea & Russia’s east coast
09:59 Ecochlor receives IMO BWMS Code Type Approval
09:51 MABUX: Bunker market this morning, Aug 07
09:16 Baltic Dry Index as of Aug 6
09:12 Crude futures prices turn down again

2020 August 6

19:00 FSL Trust agrees to sell three containerships
18:27 Sumitomo Heavy Industries has been granted an “Approval in Principle” for a medium-size high-pressure LNG dual-fueled tanker
18:21 Port of Rostov-on-Don seven-month volume rises 4% to 12.7 million tonnes
18:07 ICTSI 1H2020 net income down 12% to US$113.4mln
17:26 Royal IHC awarded major contract for supply of FPSO equipment for Yinson
17:25 Vodohod’s newbuild Mustai Karim arrives at Saint Petersburg
16:36 Nevsky Shipyard launches the Pavel Leonov, last ship of PV22 series duo
16:15 North Sea Port, Flemish Waterways plc, Port of Antwerp, Port of Oostende, Port of Zeebrugge, the Agency for Maritime and Coastal Services, and the Joint Nautical Management to introduce SWINg in 2021
15:43 Zelenodolsk Shipyard to host tomorrow launching and keel-laying ceremonies
15:41 Maritime Autonomous Surface Ships Port Network was established in Singapore
14:27 MABUX Bunker Weekly Review
13:54 Tolyattii bound heavylift project cargo successfully handled at Port Bronka
13:27 Alaska Marine Lines rail barges upgrade ballast systems
12:46 Davie confirms polar leadership with icebreaker launch
12:35 Transit container transport by RZD network soars 30% in Jan-Jul
11:40 CMA CGM to launch its ever-faster service connecting Spain with Algeria
11:35 Carnival Cruise Line joins industrywide pause in U.S. through October 31
10:18 Shell signs charter contracts for six newbuild LNG carriers
10:15 Fourth IMO Greenhouse Gas Study: Shipping emissions are projected to increase by up to 50% until 2050, relative to 2018
09:58 The Flemish government, Port of Antwerp and SeReAnt together improve the water quality at the Port of Antwerp
09:26 Baltic Dry Index as of Aug 5
09:21 Crude futures prices resume climb
09:10 MABUX: Bunker market this morning, Aug 06
08:11 NYK starts operation of its first finished-car logistics terminal in Japan

2020 August 5

18:57 Valenciaport triples air quality control cabins
18:16 U.S. Coast Guard suspends search for missing spearfisher off Maui
18:04 Port of Helsinki turnover decreased by 26.7% to EUR 33.4 million in January–June 2020
17:35 A delegation of the Port of Gdansk visits Klaipeda
17:06 Voluntary ship slowdown through Swiftsure Bank begins August 1
16:49 Mississippi River will get deeper