Global hull and cargo insurance lines returned to a technical break-even in 2020 after many years of unprofitability, although the International Union of Marine Insurance (IUMI) says a bounce back underway in shipping activity to pre-COVID levels could boost claims frequency again.

Global marine insurance premiums rose 6.1% last year to $US30 billion ($42.08 billion).

The report says early indications in 2021 were that “continued development is uncertain” and IUMI Secretary General Lars Lange says the health of marine insurance remains “mixed”.

“There is concern that a revitalised shipping and offshore industry will generate additional claims which may, in turn, impact on future profitability,” Mr Lange said. “The recovery was from a very low base”.

The hull underwriting sector grew by 6% in 2020 and global premiums reached $US7.1 billion ($10 billion).

The gap between global premiums and global tonnage has begun to reduce. Cargo underwriting achieved a 5.9% increase in global premiums to reach $US17.2 billion ($24.13 billion). However, a likely increase in natural catastrophes going forward - coupled with increased risk accumulations - has the potential to impact cargo underwriting performance this year, IUMI says.

In the offshore energy insurance sector, an oil price rally halted many years of declining premium base, which in 2020 was $US3.6 billion ($5.05 billion).

IUMI says new underwriting potential is likely to result from increased offshore reactivation but this will bring additional risk and the possibility of an increase in the current extremely low levels of claims.

See the full report here.