Economic expansion to fuel marine insurance

Positive prospects for the global economy in 2018 are going to boost the marine insurance business, according to International Union of Marine Insurance (IUMI) president Dieter Berg.

“We expect a globally synchronised boom in consumption, investment and international trade for industrialised countries and emerging markets,” Berg said in the March 2018 IUMI quarterly issue.

“This is good news for marine insurance, as premium income correlates with growth in trade volume and value,” he explained.

In addition, marine insurers are set to benefit from recovering rates.

In 2017, natural catastrophes such as hurricanes Harvey, Irma and Maria have caused massive losses to marine insurers. Multiple lines of marine insurance business were affected, including yachts and cargo, as well as ports and terminals.

But in the latest round of renewals, premiums rose in marine lines affected by losses as well as those unaffected – signalling that the soft market has definitely come to an end, Berg noted.

“I expect this improved market environment to persist in 2018,” Berg added.

Nevertheless, there are still a few downside risk including geopolitical risks, problems in the euro zone and the protectionist trade policy of the US, Berg noted. The latest US tariffs imposing heavy burdens on imports from China, the EU and other economies bear the concrete risk of triggering massive trade conflicts between the world’s leading economies.

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