Marine underwriters are facing strong headwinds as declining trade, lower investment returns and spreading piracy remain prevalent.

The latest Marine Market Review from brokers Willis reveals an initial increase in rates introduced at the start of the year has “largely evaporated”.

Surplus capacity is keeping rate rises to a minimum, with the exception of the protection and indemnity market where mutual clubs have announced an average increase of 16.5%.

Willis Marine and Willis Global Energy CEO Alistair Rivers says a substantial fall in demand for the shipment of goods has resulted in “a huge number of ships” being laid up, to an extent not seen since the 1970s.

“Laid-up vessels mean less premium for insurers and sadly, once again, we find marine underwriters hoping to raise prices just as their customers need to cut costs,” he said.

The spread of piracy is a concern for insurers as new threats emerge off the coasts of Brazil, Nigeria, Thailand and Vietnam.

There have been 75 attacks off the Somalia coast and in the wider Indian Ocean region in 2009 – a 625% increase on last year.