The International Union of Marine Insurance (IUMI) has reported an 8% increase in cargo insurance premium for 2021, compared with 2020, reaching $18.9bn. There was also an improvement in overall loss ratios.
Isabelle Therrien, Chairperson of the IUMI Cargo Committee said at this year’s IUMI conference, being held in Chicago, that the cargo market had grown in 2021 partly due to a rise in the volume of cargo that had been shipped globally, and partly because pricing corrective measures were still prevalent in that underwriting year. “The much-needed correction has yielded favourable underwriting performance. However, the industry is still facing headwinds as the global supply chain remains volatile and is still dealing with the aftershock of the pandemic while now adding inflationary pressures to the mix,” she said.
Cargo premiums increased in most markets, with China leading the growth in 2021. China now accounts for 14% of the cargo market, with the UK (Lloyd’s of London and the International Underwriting Association) having a 12.2% market share. With 2021 claims starting at a low level due to subdued activity in 2020, loss ratios continued to improve in all markets.
Therrien noted that companies were redesigning and diversifying their supply chains, with concepts such as near-shoring, reshoring and friendly-shoring gaining in traction. These developments had the potential to change risk profiles in cargo insurers’ portfolios, she said. “The pandemic has shown that factors such as stability and reliability when it comes to supply chains, are key to product availability. Our assureds are now also looking at different logistics, transportation and insurance solutions to manage this constantly evolving risk.”