IUMI Conference 2023: Marine Insurers Provide Strength and Stability In Turbulent Seas

2023 IUMI Conference was held in Edinburgh

This is part one of a two-part blog exploring the key takeaways from the recent IUMI Conference


Russell Group attended the 2023 IUMI Conference, which was held in Edinburgh this year. The conference was an illuminating three-day event, which explored some of the trends and developments taking place within the maritime insurance and shipping sectors. 

Over the course of two blogs, we present a summary of the key takeaways from the Conference: 

Opening last week’s International Union of Marine Insurance (IUMI) annual conference in Edinburgh, Scotland, President Frédéric Denèfle expanded and explained the conference common theme of “strength and stability in turbulent seas”. 

Discussing current turbulence, he said: 

“As marine underwriters, we are used to managing an array of casualties and losses onboard a variety of vessels and in ports and other shoreside facilities. Dealing with the fall-out from natural catastrophes such as earthquakes and weather events are also workaday issues. Similarly, operating amongst geopolitical chaos is an ongoing problem we face but this has been exacerbated recently with the war in Ukraine.” 

Continuing the theme of turbulence, Denèfle explained how fragmentation was also causing headaches. From a trade perspective, COVID has highlighted a range of strategic dependencies, it had led to a general reduction in global demand and had encouraged a relocation of activity closer to the consumer. On the legal side, shipping and insurance was being targeted with increased sanctions as well as local green regulations where, for example, some jurisdictions will not register vessels above a certain age.  

Inflation, partially caused by covid and the war in Ukraine was already  increasing the cost of claims. This means that underwriters must take on more risk as asset values increase, with a consequent need for more capacity in the market. Added to this, a general technology shift in terms of clean energy, clean propulsion and autonomous vessels was creating more “turbulence”.  

Heightened Reliance on Intelligence and Data 

Although the marine insurance market was in a state of flux, Frédéric Denèfle was confident in its ability to cope: 

“As the world’s oldest insurance business, our sector has demonstrated its ability to flex to new needs and conditions, both market and macro-economic. I foresee a return to dedicated, experienced teams; a heightened reliance on intelligence and data systems to anticipate the consequences of geopolitical uncertainty; the emergence of local teams underwriting local business in their own areas to challenge fragmentation; an adjustment of market capacities and pricing to fight inflation pressures; and the creation of specialist teams to fully understand the implications of new technologies. Of course, much of this is already happening.” 

Turning to IUMI itself, Denèfle said: 

“Marine underwriters face a range of complex issues but that they share common risks and don’t operate in isolation. As a community, we must invest in our collective future. Our business is not well understood and so we must draw on IUMI to bring us together, to provide a common voice and a unified path ahead.” 

Results Improving 

According to IUMI, all lines of business reported an uplift in their global premium base for 2022 with the total reaching USD35.8 billion, representing an 8.3% increase on the previous year. Global income was split by region:  Europe 47.7%, Asia/Pacific 28.4%, Latin America 10.3%, North America 8.5%, Other 5.1%. 

By line of business, the largest share was commanded by transport/cargo at 57.3% followed by global hull 23.4%, offshore energy 11.5% and marine liability (other than P&I covered by IG clubs) 7.7%. 

Astrid Seltmann, Vice-Chair of IUMI’s Facts & Figures Committee provided some context: 

“Marine underwriters have suffered poor returns over several years but from 2020 results started to improve. 2021 and particularly 2022 have shown a relatively strong growth in the global premium base across all lines of business. In combination with a benign claims impact, this has translated into a much better performance in terms of loss ratios, specifically for hull and cargo. The reasons are complex but are likely due to the post-pandemic rebound in global trade coupled with reduced market capacity, particularly for hull.” 

Future Challenges 

Jun Lin, Chair of IUMI’s Facts & Figures Committee said: 

“The overall results from our 2022 analysis do appear to indicate positive growth which is welcomed after a prolonged period of poor returns. Inflation has fallen slightly which is also positive but interest rates remain high which can mask the underperformance of the underwriting sector. However, consumer confidence is slowly recovering which should help the container trades; and I’m hearing reports that the slowdown in China might not be as severe as some believe.” 

“That said, we shouldn’t lose sight of future challenges that are likely to inject a degree of uncertainty into all our lines of business. Asset prices continue to rise and inflationary pressure will only add to the value of claims. The oil price is fluctuating and global trade forecasts vary. Trade routes are changing, not least as a result of the war in Ukraine which, itself, is changing the political landscape. New cargoes such as lithium-ion batteries are creating new risks that must be fully understood and mitigated, as are new propulsion technologies resulting from our combined environmental protection ambitions. And, of course, climate change and new weather events are also making themselves known to insurers. Added to this, we are managing new types of risk such as cyber and having to deal with the accumulation of risk as cargo of increasing value is being stored in single port facilities or is being carried on vessels that continue to grow in capacity.” 

Cargo Headwinds 

Isabelle Therrien, Chair of IUMI’s Cargo Committee identified a number of headwinds likely to impact cargo underwriters going forward. 

IUMI’s analysis of cargo premiums reported a global premium base of USD20.5 billion for 2022 representing an 8.3% increase on the previous year and demonstrating positive market development over a number of consecutive years. All regions experienced growth with the exception of Asia which was likely due to economic conditions in a number of that region’s countries plus a weakening of certain Asian currencies against the US dollar. Despite this positivity, uncertainty prevails as Isabelle Therrien explained: 

“The cargo insurance market in 2022 found itself at the intersection of economic, geopolitical and sector-specific headwinds. In the main, the cargo insurance market follows the fortunes of global trade, albeit with a time lag. Covid put the brakes on trade but this was followed by a strong rebound. However, there is much uncertainty about future economic growth and this will impact on the performance of our sector.” 

At a macro-economic level, the future of cargo insurance will be impacted by a general deceleration of global economic growth and the activity of central banks aggressively battling inflation. This is likely to herald a reduction in trade volumes world-wide. Following Covid, supply chains seem to have recovered and freight costs have eased, but some trade routes are beginning to evolve and take on a different shape post-Covid. 



Post Date: 26/09/2023

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