In the marine insurance market, fragmented trade routes, old fleets, and war-risk surcharges are changing how policies are written, how much they cost, and how claims are handled.
Geopolitical flashpoints, as well as re-routed trade lanes, are also redrawing marine insurers’ risk map exchanged at the IUMI in Singapore, sending maritime exposures whirling from the world’s trade choke points to regional fault lines, industry leaders said at the conference. The talks, led by IUMI president Frédéric Denèfle, characterised the current juncture as a tipping point in “de‑globalization”, where longer voyages, nearshoring and infrastructure bottlenecks would challenge conventional underwriting approaches. Now, it’s all about disciplined pricing for marine insurers, sharper wordings for emerging perils and accumulation control that is informed by data and reflects the fragmented nature of the trading system – not a completely integrated one.
Marine insurance faces a new era.
Geopolitical tensions and shifting trade routes are redefining the rulebook for the marine insurance sector, according to industry members at the International Union of Marine Insurance (IUMI) conference in Singapore.
IUMI president Frédéric Denèfle (right) established the tone for the event by highlighting the seismic shifts confronting marine insurers as globalization patterns shift.
Denèfle noted that the sector is developing in the direction of what he referred to as the “end of globalization,” a period that he has written about at previous sessions but now thinks is reaching a tipping point.
“We’re approaching the end of globalization,” Denèfle said. “Prior to COVID we had begun to see a slow de-globalization, but since COVID, it appears the speed of de-globalization has only increased. Concern about US tariffs are down, but emerging trade will become a bigger concern regionally. National interests and regional tensions are changing the fundamentals of global trade. With the conflict in Ukraine and Russia, and the conflict in the Red Sea area, we see proof hard national interests come before international cooperation and peaceful economic development.
During his workshop, Denèfle highlighted that international commerce is not ending, but rather evolving. He said that marine insurers must adapt to a new climate in which classic shipping and logistics methods are being challenged.
“The global trade environment is no longer headed towards complete integration. Instead, fragmentation is gaining traction, posing new difficulties and possibilities for risk assessment, underwriting, and innovation,” he said.
Denèfle identified numerous elements that are already having an influence on the industry. Vessels are rerouting to avoid high-risk locations, which means lengthier and more costly travels. There is also the possibility of a comeback of inland transportation and nearshoring, as well as increased commodity costs, which might add to inflation. Supply networks are being reorganised, necessitating investments in new infrastructure.
Furthermore, the business is becoming increasingly reliant on artificial intelligence, alternative trade routes, and new markets.
Changing risks and market pressures
The marine insurance business is also dealing with growing risks due to the ageing global fleet. More than half of all maritime casualties in 2024 included boats older than 20 years, with industry statistics indicating a 42% increase in casualty incidences between 2018 and 2024.
This tendency is generating to a significant increase in high-value claims, with seventeen Pool claims above $10 million recorded to the International Group in 2024, and expenditures double when compared to the same period in the preceding two years.
Another new issue is the increasing number of fires on automobile carriers, especially those hauling electric cars (EVs). These occurrences provide a challenge for insurers because to the densely packed layouts of vehicle carriers and the special risks presented by lithium-ion batteries.
The prolonged war in the Red Sea has exacerbated risk profiles for maritime insurers. Coverage prices for boats crossing this area have surged dramatically, with war risk premium rates reaching as high as 1% of a ship’s worth, up from 0.4% earlier this year.
For a vessel worth $100 million, this amounts to a premium of up to $1 million, impacting global shipping firms’ operating margins and routing choices.
Despite these issues, Denèfle described the marine insurance industry as steady. “Financial ratings are strong, and trust in insurers remains high,” he told reporters.
He admitted that a dramatic decline in international commerce might have an impact on worldwide premium levels, necessitating a rethinking of business planning and underwriting tactics. However, he insisted that the industry remains resilient.
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