Despite an improvement last year in bottom lines for members of the International Union of Marine Insurance (IUMI), challenges still remain. IUMI is meeting this week for its annual conference, which this year is being held in Berlin.
While the 2014 underwriting year seems to have produced a technical profit for the cargo sector, IUMI warned that the Tianjin explosion last month – “potentially the largest single cargo loss ever recorded” – will impact significantly on 2014 and 2015 results.
Delegates attending the Berlin event were warned that the ultimate bill for the chemical explosions at Tianjin port might hit $6bn.
“The outlook for the cargo market is hard to predict in light of the current changing economic environment,” IUMI said in a release.
Meanwhile, the “extraordinary absence” of major hull losses in 2014 resulted in the hull sector recording a technical profit for the underwriting year 2014.
“2015 has already seen a number of total losses and this will have a negative impact on the 2015 results,” IUMI warned.
Vice chairman of IUMI’s facts & figures committee, Astrid Seltmann explained: “Although the hull sector turned-in a technical profit this year, we can attribute that positive performance to an unusual lack of large vessel losses. I don’t believe this is the new normal and I would not be surprised to see a reversal of fortunes for the hull sector in future years”.
IUMI’s offshore revenues are expected to take a hit from the continuing low oil price which has seen many offshore projects delayed or cancelled.
“A series of high profile losses already recorded in 2015 coupled with the low interest rate environment and general market instability was thought to have a detrimental effect on future income and results,” IUMI said in a release.
Patrizia Kern-Ferretti, chairman of IUMI’s facts & figures committee concluded: “Uncertainty seems to be the only constant going forward. Economic upturn is likely to support growth in premiums but the high growth markets are slowing down. Risks from a China-led slowdown have also increased. Although world-trade is subdued, it is not clear how far this reflects a structural shift in trade intensity of production.”