While many types of property and casualty insurance sectors haven’t performed all that well in the last few years – due in large part to the rising number of claims being made on a national and even global level – this does not necessarily seem to be the case when it comes to certain types of marine insurance.
While many types of property and casualty insurance sectors haven’t performed all that well in the last few years – due in large part to the rising number of claims being made on a national and even global level – this does not necessarily seem to be the case when it comes to certain types of marine insurance. In fact, the opposite is true for certain kinds of policies sold to large ship owners.
The International Group of Protection and Indemnity Clubs, an organization of marine insurance providers, recently announced an average 2.5 percent increase in premiums for policies in 2016, according to a report from Canadian Underwriter. Indeed, in making that announcement, the group said that the state of its industry is healthier than it has ever been simply because relatively few claims are being filed these days. Those filings can be a little volatile, but nine of the group’s 13 members reported improved results in this regard for 2015.
The commercial marine insurance industry is in very good shape these days.
A closer look
While there are some other issues that could linger in the market for some time to come – such as potentially problematic areas of investment, the lack of claims last year is seen as an overarching positive, the report said. Indeed, it has allowed the first underwriting surplus the 13 companies in the organization have collectively experienced in the last five years, and could portend good things to come.
However, there may be some reason for concern as premiums rise, the report said. The fact of the matter is that many shipping companies may simply be concerned with the cost of coverage overall, even as prices remain more or less moderate, due to outside pressures on their bottom lines, unrelated to the insurance industry at all.
“The 2016 renewals will likely prove contentious as general increases come under pressure from ship operators looking to reduce costs in challenging freight markets whilst a number of underwriters sit on healthy underwriting surpluses,” said Ben Abraham, head of the marine division of Willis, according to the site.
Other things to keep in mind
The data here takes into account a number of different types of coverage provided by the insurance companies that are part of IG, the report said. These include policies to protect against injuries to crew and passengers aboard commercial ships, damage or loss of cargo, dock damage, wreck removal, and even plans to cover costs related to the remediation of oil spills. Given that there has generally been better performance across the board in this regard over the course of 2015, that might provide P&C insurers – and ship owners alike – to feel better about their continued chances for success in 2016, and potentially beyond.
Certainly, though, this is an area all involved will have to monitor closely to determine where they stand on an ongoing basis. The more companies can do to understand the risk involved in commercial shipping ventures, the better off they’re likely to be.
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