COVID-19 Poses Uncertain Future for Global Marine Insurance
WMN..Marine underwriting premiums for 2019 recorded a reduction of 0.9% year over year and were estimated at $28.7 billion, the International Union of Marine Insurance (IUMI) said.
As informed, 2019 saw Europe’s global share reduce slightly from 46.4% (2018) to 46.3% and Asia’s share increase modestly from 30.7% (2018) to 31.8%.
For global marine premium by line of business, cargo continued to represent the largest share with 57.5% in 2019, hull 24.1%, offshore energy 11.7% and marine liability 6.8%.
“The numbers we are reporting today (15 September) cover the 2019 underwriting year and are pre-COVID-19. In the past, we’ve been able to analyse trends to get an understanding of potential future outcomes but COVID is such a significant global event that it will inevitably impact on all statistics, including IUMI’s,” Philip Graham, Chair of IUMI’s Facts & Figures Committee, explained.
“Clearly there is a lag between IUMI’s reported 2019 numbers and the effect that COVID is having on the marine insurance markets. The loss ratio figures as of 2019 suggest the start of a modest recovery in the hull and cargo segments and a continued fragile balance in the energy segment, but it is still early days and it remains to be seen how far COVID-19 will impact these trends going forward.”
According to Graham, due to COVID-19, there has been lower utilisation of certain vessel classes such as containerships, cruise ships and yachts. A direct result is the abnormally low level of claims incidents recorded in recent months.
“While this is good for underwriters in the short-term, we should be wary of a return to normality as utilisation begins to increase.”
“Similarly, COVID has negatively impacted the oil price causing a slow-down in offshore activity. Underwriters need to be aware of the uncertain consequences of a return to more normal levels of production.”
“In my view, the coronavirus pandemic has, in a few short months, digitally moved many industries, particularly the insurance industry forward by at least a generation. In many ways this is extremely positive and we need to maintain that momentum as we look to improve efficiencies and manage down the transitional cost of insurance, driving a more flexible, efficient and inclusive environment,” he continued.
“However, we must also be mindful of how the pandemic has financially impacted many of our clients and the potential impact that could have on risk management. As importantly, we must not forget the sacrifices being made every day by all those at sea who as a result of the pandemic have continued to serve world-trade in extremely challenging conditions for extended periods and often without the ability to see loved ones for a considerable time with the associated fatigue and mental anguish that accompanies that”.
*Culled from World Maritime News.
As informed, 2019 saw Europe’s global share reduce slightly from 46.4% (2018) to 46.3% and Asia’s share increase modestly from 30.7% (2018) to 31.8%.
For global marine premium by line of business, cargo continued to represent the largest share with 57.5% in 2019, hull 24.1%, offshore energy 11.7% and marine liability 6.8%.
“The numbers we are reporting today (15 September) cover the 2019 underwriting year and are pre-COVID-19. In the past, we’ve been able to analyse trends to get an understanding of potential future outcomes but COVID is such a significant global event that it will inevitably impact on all statistics, including IUMI’s,” Philip Graham, Chair of IUMI’s Facts & Figures Committee, explained.
“Clearly there is a lag between IUMI’s reported 2019 numbers and the effect that COVID is having on the marine insurance markets. The loss ratio figures as of 2019 suggest the start of a modest recovery in the hull and cargo segments and a continued fragile balance in the energy segment, but it is still early days and it remains to be seen how far COVID-19 will impact these trends going forward.”
According to Graham, due to COVID-19, there has been lower utilisation of certain vessel classes such as containerships, cruise ships and yachts. A direct result is the abnormally low level of claims incidents recorded in recent months.
“While this is good for underwriters in the short-term, we should be wary of a return to normality as utilisation begins to increase.”
“Similarly, COVID has negatively impacted the oil price causing a slow-down in offshore activity. Underwriters need to be aware of the uncertain consequences of a return to more normal levels of production.”
“In my view, the coronavirus pandemic has, in a few short months, digitally moved many industries, particularly the insurance industry forward by at least a generation. In many ways this is extremely positive and we need to maintain that momentum as we look to improve efficiencies and manage down the transitional cost of insurance, driving a more flexible, efficient and inclusive environment,” he continued.
“However, we must also be mindful of how the pandemic has financially impacted many of our clients and the potential impact that could have on risk management. As importantly, we must not forget the sacrifices being made every day by all those at sea who as a result of the pandemic have continued to serve world-trade in extremely challenging conditions for extended periods and often without the ability to see loved ones for a considerable time with the associated fatigue and mental anguish that accompanies that”.
*Culled from World Maritime News.
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