Willis Global Marine – Another Difficult and Uncertain Year for Maritime Industry

Willis Global Marine - Another Difficult and Uncertain Year for Maritime Industry

After an inauspicious start, 2012 will be another difficult and uncertain year for the maritime industry faced with the aftermath of the Costa Concordia, further problems in the Euro zone, pirate attacks and increased sanctions, according to Willis Global Marine, part of Willis Group Holdings, the global insurance broker.

The latest Willis Marine Market Review reveals the Hull market is in a state of flux following the Costa Concordia disaster in January. Some underwriters in the London insurance market, which will bear the majority of the estimated USD 500m hull claim, are adamantly refusing premium reductions or even flat renewals. However, unaffected underwriters in the Far East and Scandinavia are more open to negotiations.

Marine liability underwriters meanwhile are hoping the disaster drives through a general hardening of rates, with many seeking 5% increases going forward.

Cargo insurance buyers continue to enjoy the benefits of a soft market, achieving reductions in both premium and deductibles, as well as increases in limits, at little or no additional cost. Despite ever-dwindling returns to insurers, competition for business remains fierce with a flurry of new entrants creating excess capacity.

Cargo underwriters are also feeling the impact of piracy, which continues to blight the shipping industry with no clear resolution in sight. The security measures taken by ship-owners are increasingly effective with less than 20% of attacks successful in 2011. However, this has only served to increase the demands and expectations of those attacks that do occur with total ransoms increasing 77% from 2010*.

Alistair Rivers, CEO of Willis Global Marine said: “For many marine insurers the year began badly with the loss of the Costa Concordia cruise liner. It was a timely reminder that 100 years on from the loss of the Titanic, disasters on this scale are still possible despite all the industrial and technological advancements. But while this loss may have stiffened the hull market, the long term impact is questionable. The P&I and Liability aspects of this loss will be of far greater significance to insurers as matters evolve throughout the year.

“However, a truly hard market is a mirage as long as capital providers are prepared to tolerate marginal returns from their hull and machinery book.

“These are difficult times for the maritime industry: world shipping is in recession; the economic turmoil continues to dampen demand; pirates are seizing property and crew; and increased sanctions demand further resources and attention. But maritime trade has seen and overcome similar challenges in the past and the entrepreneurial spirit that drives the industry remains intact.”

The Marine Review describes this years’ February P&I renewals as disproportionately confrontational and protracted as ship-owners operating in one of the worst economic environments for a generation contested even inflationary increases from Clubs. On average, rate increases of 4% were achieved.

Excess capacity in the Asian marine insurance market is putting pressure on rates as local and foreign insurers compete for market share. Asia is now home to around half of the world’s merchant fleet, 14 of the top 20 ports and three of the largest ship building nations.

In the commodity insurance market, underwriters are responding to commodity price volatility by tightening clauses and scrutinising policy wordings with prices edging up for technically unsound risks.

Rates continue to slide in the Super Yacht insurance market due to a combination of modest loss ratios, underperformance in the hull market and increased capacity. The economic problems in the Euro zone have also caused some Super Yacht owners, particularly in the US, to scrutinise the stability of European insurance markets.

Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world.

Source: Willis Group, April 20, 2012; Image: Boskalis

Share this article

Follow World Maritime News

In Depth>


<< Oct 2015 >>
28 29 30 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1

Canada LNG Export Conference and Exhibition 2016

Following the tremendous success of DMG’s 3rd Annual Canada LNG Export Conference & Exhibition, those fundamental to the development of LNG…

read more >

Seatrade Offshore Marine & Workboats Middle East 2015

Middle East Workboats 2015 is firmly established as the definitive and leading industry event for the region. As a visitor you will be part…

read more >

Danish Maritime Technology Conference 7-8 October 2015

Danish Maritime Technology Conference is a summit for the maritime industry taking place during Danish Maritime Days 2015.

The conference gathers the newest, most innovative and sustainable technologies from the Danish Maritime industry.

The conference is held with support from The Danish Maritime Fond and in collaboration with members of Danish Maritime such as: MAN Diesel & Turbo, Wärtsilä Danmark, Emerson Process Management Marine Tank Management – Damcos A/S, Inrotech, VIKING Life Saving Equipment, Hempel, Alfa Laval Danmark, Force Technology and Søby Yard.

Danish Maritime Technology Conference is free of charge.

Read more about the conference here.

read more >

Marintec China 2015, Shanghai, China


Facts & Figures of Marintec China:
• The exhibition spread over 70,000 square metres in Shanghai New International Expo Centre
• Over 1,700 exhibiting companies were participating in the event
• 57,888 quality trade visitors from 88 countries/regions
• 16 national & regional pavilions from Austria, China, Denmark, Finland, France, Germany, Hong Kong SAR, Japan, Korea, the Netherlands, Norway, Singapore, Sweden, Taiwan region, the United States and the United Kingdom were organised

About Marintec China

Marintec China 2015 will be held on 1-4 December 2015 in Shanghai. With increasing worldwide recognition and reputation throughout the past three decades, the exhibition is attracting an increasing number of high-profile exhibitors and visitors from around the world.

Regarded as the only gateway to the Asian maritime market, Marinetech China has become larger than ever! Being the most recognized maritime trade show in Asia, Marintec China is definitely an international marketplace for buyers to source from international sellers showcasing their latest marine, ship design, offshore engineering and port technology.

Over the years, Marintec China has grown to reflect the size and importance of the Asian maritime market. Marintec China 2013 has broken all the previous records attracting more than 1,700 exhibiting companies from 32 countries /regions and 16 group pavilions, making it the most international and authorised industry event in Asia. Taking place once every two years, Marintec China 2015 edition is a unique opportunity for suppliers to connect with new customers and re-connect with existing contacts from the region, and final one to present new products and services to the trade visitors and experts from all parts of the world.

Visit Marintec China 2015 website for more details www.marintecchina.com

read more >