Global marine premiums dropped by 1.7% last year, falling from USD 34.8bn in 2012 to USD 34.2bn, as shown by the latest statistics released by the International Union of Marine Insurance (IUMI) at its 2014 annual conference held in Hong Kong.
The conference gathered over 500 attendees who heard from industry experts on how the marine environment is evolving as governments and businesses attempt to chart a secure, sustainable economic recovery.
As explained by IUMI, world trade is still suffering from the lasting effects of the EU recession, high unemployment rates in the EU along with uncertainties regarding the U.S. Federal Reserve’s “unconventional policies”.
Astrid Seltmann, Vice-Chairman of the Facts and Figures Committee said that despite increasing global trade volumes, cargo premiums are stagnating.
In the USD 18.2bn cargo premiums market, Europe has a 43.8% market share, with the Asia-Pacific region contributing 29.2% of premiums.
China tops the cargo rankings with a 9.3% market share, followed by Japan with 8.5%.
With respect to hull insurers, premiums are also stagnating despite a continuous increase of the world fleet. Hull premiums for 2013 were USD 8.52bn, down 0.8% on 2012. Europe has the most business with 52.6%, followed by Asia with 32.4%.
According to IUMI, after a period of stabilization the dry freight rates have fallen again due to stagnating demand, overhang of shipping capacity with new ships continuing to come on stream along with Indonesia’s ban on exports of nickel and aluminum.
IUMI expects the global economic recovery to be gradual and shallow, with central banks expected to stick to their current monetary policy.
Permanent change in trade intensity of production is going to affect long-run demand for marine insurance, which means further uncertainty with respect to marine premiums.
This will also be influenced by upcoming persistent capacity inflow together with continued pressure on rates.
London is expected to remain the largest marine insurance hub, however trade is shifting to Asia and Latin America.