“Continuing uncertainty is the only certainty for marine underwriters,” a senior member of the International Union of Marine Insurance (IUMI) has warned.
Speaking at an IUMI conference in Tokyo today, Donald Harrell, chairman of the union’s facts and figures committee described the marine insurance outlook as “challenging and uncertain”.
“Global premium income continues to fall and this puts pressure on our sector… Exposure to risk will only increase as vessels grow larger and values accumulate in port. A drop in premium income makes it challenging for underwriters to continue to cover their obligations, particularly in relation to major losses,” Harrell said.
Harrell maintained the tough shipping and offshore markets are continuing to adversely affect IUMI members’ premium income.
Hull premiums have deteriorated in line with falling average vessel values, IUMI noted, and there is now a mismatch between fleet growth and income levels.
Also speaking at IUMI’s annual conference was the association’s president, Dieter Berg, whose speech focused on disruption.
“We need to inhale innovation. Digitalisation will change the way our clients operate and we, as marine insurers, must follow suit. In the future, insurance will be placed on electronic platforms as our next generation of clients will want 24/7 access to insurance products and instant responses. The insurance value-chain will shrink and the role of the broker will inevitably be impacted as well. Because of this, it is likely that global premium income will continue to reduce and this means that we, as marine insurers, need to change our game and find additional streams of revenue,” Berg said. He went on to stress: “Digital innovation does not have to destroy value in our market.”