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Geopolitical conflicts and shifting trade patterns are redefining risks and opportunities for the marine insurance sector.
Opening this year’s International Union of Marine Insurance (IUMI) conference in Singapore, IUMI president Frédéric Denèfle warned that marine insurers are facing significant change as the world approaches the end of an era of seamless globalisation.
Hard national interests are taking precedence over international cooperation
Denèfle reflected on the deepening shifts in global trade — a theme he has raised in previous IUMI conferences but says has now reached a critical turning point:
“The end of globalisation is fast approaching,” he said. “We’ve already witnessed a slowdown in recent years, but post-covid the trend has accelerated. While some uncertainty over US tariffs has eased, escalating trade tensions and regional conflicts are reshaping the foundations of international commerce. Conflicts in Ukraine/Russia, and the Red Sea are a stark reminder that hard national interests are taking precedence over international cooperation and peaceful economic growth.”
Denèfle explained that the changing environment does not signal the end of international trade, but rather a mutation into a new era — one that marine insurers must understand.
“Traditional shipping and logistics practices are being disrupted,” he said. “The global trade environment is no longer moving toward seamless integration. Instead, fragmentation is taking hold, creating new challenges and new opportunities for risk assessment, underwriting and innovation.”
According to Denèfle, this change was already making itself known in a number of ways including: vessels avoiding high-risk regions and using longer, costlier routes; a possible resurgence of inland transport and nearshoring; rising goods prices and subsequent effects on inflation; reorganisation of cross-border supply chains, requiring investment in new shore-side infrastructure; and increased reliance on artificial intelligence, alternative trade corridors and emerging markets.
These dynamics, he suggested, could give rise to a new type of shipping industry — one that is more adaptive, technology-driven and strategically diversified.
IUMI officials also presented their analysis of the latest marine insurance market trends today in Singapore.
The global marine insurance premium base for 2024 was reported as $39.92bn, representing a 1.5% increase on the previous year.
By line of business, the largest share was commanded by transport/cargo at 57.23% followed by global hull 23.51%, offshore energy 11.71% and marine liability (other than P&I covered by IG clubs) 7.55%.
Cargo continues to dominate global marine insurance premiums accounting for $22.64 bn in 2024, an uplift of 1.6% from the previous year.
The ocean hull sector reported global premiums of $9.67 bn representing a 3.5% increase from the previous year.
Fires on car carriers and container vessels continue to be a major issue for hull and cargo insurers, IUMI warned, while the ageing of the global fleet presents “challenges”, IUMI stated in a release, explaining: “Delayed scrapping leads to older tonnage remaining in service which, in turn, raises the frequency of machinery claims.”
The Nordic Association of Marine Insurers (Cefor) also recently discussed the “silver tsunami” issue of the ageing global fleet in its mid-year hull report.
“As older vessels are more prone to machinery problems, an increase in costly machinery damage and other issues related to the engine room and machinery may be linked to the ageing of the fleet,” Cefor noted.
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