A series of unpredictable events
Over the last 4 years, underwriting marine insurance has been more challenging than ever thanks to unpredictable external events. Between a pandemic, the Suez Canal blockage, wars and sanctions, and extreme weather, the risk profile for the industry is becoming more complex.
During 2023, the sector started to rebound from the pandemic, and many markets saw improved growth while loss ratios returned to a more normal, flatter pattern.
However, the disruption in the Red Sea in 2024 has had repercussions on a global scale. The Red Sea is bordered by six sovereign nations, with five actively engaged in shipping: Egypt, Eritrea, Israel, Sudan, and Yemen. The Red Sea serves as a vital shipping route, connecting one end of the Suez Canal. These countries host 55 active shipping ports, which Dun & Bradstreet data shows had previously shown increasing shipping activity. However, recent events have led to a significant decline, with a reduction of 21% in shipping container imports through the Red Sea in December 2023 to Europe, as compared to the average monthly imports from September 2022 to September 2023. According to Reuters, war risk insurance premiums have recently risen from 0.7% to around 1% of the value of a ship, due to the ongoing conflict.
These disruptions affect normal activities like vessel arrivals, loading and unloading, leading to commercial losses for those businesses whose shipments are late or damaged. This causes increased nervousness from insureds, who in turn are demanding higher cover.
When it comes to the most common claims, the number one cause of marine insurance losses by value were fires on board vessels, often due to mis-declaration or non-declaration of cargos, according to Allianz’s Global Risk Dialogue 2022. The most frequent cause of claims was damaged goods and cargo due to temperature variations, theft and inadequate containers.
Furthermore, the size of vessels as well as the volumes and values of cargo upon each one are growing to meet the demands of consumer buying. Underwriters are under pressure to find new ways to assess and respond to amplified risk.
What you don’t know can hurt you
To accurately assess marine risk and make smart decisions that take these challenges into account, underwriters require visibility into the risk of each shipment, and insight into fleets and cargo on board. However, the industry is left with frequent information gaps due to relying on information provided solely by clients and publicly available data.
Because of this, there has traditionally been a poor understanding of ownership, linkage, counterparties, cargo and the accumulation of values and therefore many insurance professionals have found it hard to accurately underwrite marine risk.
Underwrite marine the smart way with trusted data
Some of the world’s top insurers already depend on Dun & Bradstreet’s global data to make smarter decisions. Now, we’re expanding our expertise and capabilities into the marine sector to help plug the gaps.
D&B Shipping intelligence provides comprehensive global coverage for underwriters looking to strengthen their marine risk assessments with data spanning 900 waterborne imports and exports, from over 200 countries.
We can give earlier visibility into the data required to make decisions, even over publicly available information, so clients benefit from early, accelerated insights into:
Accumulation of values onboard each vessel
Ownership, company linkages and counterparties involved in each journey
The impact of sanctions and supply chain vulnerabilities
Actual shipping route taken vs planned routes
Historical shipment velocity and value for loss adjustments
Download the D&B Shipping Intelligence brochure for more detail on how we can help Marine Insurance Underwriters.
If you would like to take the risk out of marine underwriting, protect your reputation and improve your loss rations, contact us today at firstname.lastname@example.org .