Australia is feeling its share of the pain in the global commercial marine insurance market as the economic downturn squeezes demand and keeps a lid on rates.

Delegates at last week’s International Union of Marine Insurance (IUMI) annual meeting last week in Belgium were painted a bleak picture, attributable to the sharp drop-off in shipping that has followed a decade of insurers’ expanding capacity.

Hull rates showed a reported 2.4% rise although the market recorded its 12^th straight unprofitable year. 

Premiums for offshore energy business have shown the steepest decline, dropping 19.4%, while marine liability and cargo lines eased 8% and 2.3% respectively, according to data attributed to IUMI.

Last year’s premiums for hull, cargo, marine liability and offshore energy were down 3.6% on 2007, at $US22.9 billion ($26.2 billion).

A marine underwriter, who asked not to be named, told insuranceNEWS.com.au that while Australia does not see much hull business, the cargo market is really feeling the downward pressure on rates.

“Historically, cargo has been a profitable area and it’s basically the core of most people’s books in this country so they do chase it very aggressively,” he said.

“A lot of the liability we see is on the bigger end. I’d be a little optimistic and say at best it’s flat. The high limits keep a lid on the competition so the rates are tending to hold where they are.”

With most offshore energy business written in London, exposure to this market is limited.