Regarding the relationship between shipping companies and leasing firms, Xiong Jianfeng believes cooperation should be primary, with competition secondary.
In terms of cooperation, most vessels owned by leasing firms are chartered out to lessees (including shipping companies) through long-term bareboat or time charter arrangements, avoiding direct competition with shipping companies in the freight market. Leasing firms provide shipping companies, especially small and medium-sized ones, with more flexible capacity, broadening their sources of tonnage and supporting their leapfrog development. Compared to owning vessels, operating leases reduce lessees’ debt ratios, while floating rental rates ease their cash flow pressures. The involvement of leasing firms enhances the specialization within the shipping industry, with investors, operators, and managers each fulfilling their roles, thereby improving efficiency.
On the competitive front, leasing firms can rapidly expand their fleets due to their financial advantages, making them more capable of counter-cyclical investments compared to traditional shipping companies, thus gaining cost advantages. Additionally, an increasing number of traders and cargo owners are directly leasing vessels from leasing firms, creating some competitive pressure on shipping companies. Despite this competition, the development of ship leasing and the rise of financial shipowners are irreversible trends. Leasing firms should learn more from shipping companies to continuously improve their professional capabilities, while shipping companies must accept and adapt to this shift. Both sides should collaborate to advance the sustainable development of the shipping industry.
Xiong Jianfeng’s in-depth analysis of the impact of leasing firms on the shipping ecosystem clarifies the current state, developmental stage, global position, and relationship between leasing firms and shipping companies, helping to drive higher-quality growth in the shipping industry with financial support.
**Marine Insurance: {Elevating Perspectives and Taking Initiative}**
Xu Feng, President of the Shanghai Marine Insurance Association and Assistant General Manager of China Pacific Property Insurance Co., Ltd. (Shanghai Branch), analyzed the current state, challenges, and potential opportunities in marine insurance to outline a future direction for the industry.
According to data Xu Feng presented at the financial sub-forum, China has become the world’s largest shipping capacity controller, which undoubtedly raises higher demands for Chinese marine insurers and signifies China’s growing influence in the shipping sector. Marine insurance, a critical safeguard for the industry, primarily covers cargo and hull insurance. The International Union of Marine Insurance (IUMI) reports that in 2023, global cargo insurance premiums reached $22.1 billion, with China accounting for 14.4%, while global hull insurance premiums totaled $9.2 billion, with China holding an 11.1% share.
Reviewing China’s marine insurance premium data over the past 28 years, the total annual property insurance premiums grew from RMB 38.2 billion in 1997 to RMB 1,690.7 billion in 2024—a 44-fold increase with an annualized growth rate of 12.2%. Over the same period, marine insurance premiums rose from RMB 4.5 billion to RMB 36.6 billion—an 8-fold increase with an annualized growth rate of 7.8%. However, marine insurance’s share of total property insurance premiums declined from 11.78% in 1997 to 2.16% in 2024. These figures reflect a relative decline in marine insurance’s standing within China’s insurance market but also indicate significant future growth potential (see Table 1).
On challenges facing marine insurance, Xu Feng echoed Feng Yue’s views and added that domestic market saturation, the reinsurance market’s pricing gap, and the entrenched monopoly of the International Group of P&I Clubs (IG) further constrain the industry’s development.
Xu Feng also highlighted potential opportunities within marine insurance.
At the national strategic level, the growing demand for specialized construction insurance due to deep-sea naval development opens new business avenues. The government’s heightened focus on national security strategy underscores marine insurance’s expanding role in safeguarding strategic interests.
Digitalization and green trends—such as digital trade chains, new energy, and offshore wind power—present fresh growth opportunities, prompting insurers to innovate products and services to meet market demands.
Addressing these challenges and opportunities, Xu Feng outlined clear industry goals:
1. **Enhancing underwriting capabilities**, particularly in strategic sectors like resources (grains, iron ore, crude oil), high-end equipment (semiconductors, electrical devices), emerging industries (new energy vehicles, energy storage, wind power), and advanced vessels (cruise ships, LNG carriers, container ships, PCTC ro-ro vessels, specialized equipment ships, and military vessels), ensuring self-sufficiency.
2. **Optimizing global service networks** to provide comprehensive, immediate risk solutions. Strengthening overseas maritime guarantees, surveyors, legal services, and cargo claim recovery, while improving risk mitigation and loss prevention to support the Belt and Road Initiative.
3. **Offering robust risk coverage** for enterprises in national strategic security sectors, aligning legal frameworks with international standards while addressing China’s practical needs, and enhancing data collaboration with banks, customs, cargo owners, shipowners, and maritime authorities.
4. **Actively shaping international rules and industry standards**, elevating China’s influence in global marine insurance.
Xu Feng’s insights provide valuable guidance for industry practitioners, helping marine insurance play a more pivotal role in serving national strategy and global shipping markets.
The in-depth discussions at this Marine Finance and Insurance Forum brought together government agencies, insurers, and financial institutions, clearly outlining the critical role of marine finance and insurance in advancing high-end shipping. Shipping is the “lifeblood” of the global economy, and marine finance and insurance are the key supports ensuring its smooth flow. Moving forward, with collaborative innovation, strengthened partnerships, and enhanced efficiency, marine finance and insurance will provide stronger risk safeguards for China’s shipping industry as it moves toward high-end and globalized development. It will also contribute significantly to the Belt and Road Initiative and the creation of a safer, more stable, and efficient global shipping ecosystem, showcasing China’s wisdom and responsibility on the world stage.
