Insurance Industry Blog

The fortunes of ocean marine insurers are inextricably tied to the state of the economy and world trade so in today’s environment of slow economic growth, low inflation and minimal interest rates they really have their work cut out. At the annual meeting of the American Institute of Marine Underwriters (AIMU) in New York City yesterday, AIMU chairman Dennis Marvin noted that with fewer ships to insure, fewer goods in transit to cover with reduced value of merchandise and lower exposures most marine segments are seeing flat or falling premium volume. Combined with more than sufficient capacity, the budget constraints of buyers and shrinking profit margins, these factors are likely to lead to a continuing soft market in 2010, he said. “Now, more than ever, the most successful marine underwriters are the most diligent, knowledgeable and focused on the risks they assume,” Marvin said. Restrictive trade practices, cargo theft and piracy attacks are just some of the other issues affecting marine insurers. While incidents of piracy continued to increase during the first nine months of 2009, with the Gulf of Aden and the coast of Somalia primary areas of concern, a host of initiatives are being undertaken to counter the threat. For example, Marvin noted that a consortium of industry associations, including the International Union of Marine Insurers (IUMI), have produced a set of guidelines which stress that superior planning and training by a ship’s crew can significantly reduce the risk of hijacking.