In its review of the marine insurance market during the first half of 2023, broker Miller Insurance Services has noted that the supply chain issues of 2022 look to have eased, but many of the underlying drivers remained active, with the global macroeconomic environment still far from favourable.
Miller said that the impact of wording change imposed by reinsurers has shifted exposure back into the direct market, resulting in capacity reduction for war risks. While there was still more than adequate capacity to cover all the vessels in the world fleet, premiums had been higher than might otherwise have been the case.
Insurers had been successful in improving sanctions monitoring and enforcement, but outside of the insurance industry there had been unintended consequences, such as the emergence of the ’dark’ fleet.
Pressure to decarbonize the shipping industry was expected to continue, and the monitoring of progress was likely to remain in the crosshairs of pressure groups.
Losses from the hull and machinery property damage class appeared to endure. However, following more than 24 quarters of premium increases, the base was far more resilient to withstand the expected losses.
However, significant losses in the first half of the year, such as the Kodiak Enterprise and the Skandi Buzios, were keeping insurers disciplined, because the cost of capital was high.
IMN will be taking a more in-depth look at each of these issues over the coming days.