With the global marine insurance industry paddling upstream against the economic downturn, Australia is fighting its own specific battles against the export-suppressing strong local currency, expensive claims and staff moves in the industry.

As reported in insuranceNEWS.com.au two weeks ago, global broker Willis has painted a bleak picture for marine underwriters internationally, with declining trade, lower investment returns and the growing problem of piracy.

It says surplus capital is keeping a lid on rate rises, except in the protection and indemnity market where mutual clubs have seen an average increase of 16.5%.

Associated Marine Insurers MD Stephen Ford says the resurgent Australian dollar has provided a sting in the tail for cargo business following on from the global financial crisis.

“For our bulk exporter clients especially, there was some reduction in turnovers 12 months ago,” he told insuranceNEWS.com.au. “But there was a little bit of a compensating effect at the time because the dollar plunged as well.

“We have seen an increase in the average claim amount, although the count is fairly stable.”

Mr Ford says there is a lot of competition in the Australian marine market, with many underwriters changing companies.

Marsh’s Managing Principal Marine James Metters also identifies staff movements as a downward force on marine insurance rates.

“A lot of marine underwriters in Australia have moved companies and are trying to put runs of the board at the moment, and that increases competition,” he told insuranceNEWS.com.au.

Mr Metters says clients have been feeling the effects of a slower economy in their turnover but a number of them are holding up quite well and coming back.

“The steel industry was pretty badly hit through the year but it seems like that is starting to come back now,” he said.

“Probably the biggest issue we’ve got is the high dollar.”