The International Union of Marine Insurance (IUMI) has reported
an 8% increase in cargo insurance premium for 2021, compared with 2020,
reaching $18.9bn. There was also an improvement in overall loss ratios.
Isabelle Therrien, Chairperson of the IUMI Cargo
Committee said at this year’s IUMI conference, being held in Chicago, that the
cargo market had grown in 2021 partly due to a rise in the volume of cargo that
had been shipped globally, and partly because pricing corrective measures were
still prevalent in that underwriting year. “The much-needed correction has
yielded favourable underwriting performance. However, the industry is still
facing headwinds as the global supply chain remains volatile and is still
dealing with the aftershock of the pandemic while now adding inflationary
pressures to the mix,” she said.
Cargo premiums increased in most markets, with China
leading the growth in 2021. China now accounts for 14% of the cargo market,
with the UK (Lloyd’s of London and the International Underwriting Association)
having a 12.2% market share. With 2021 claims starting at a low level due to
subdued activity in 2020, loss ratios continued to improve in all markets.
Therrien noted that companies were redesigning and
diversifying their supply chains, with concepts such as near-shoring, reshoring
and friendly-shoring gaining in traction. These developments had the potential
to change risk profiles in cargo insurers’ portfolios, she said. “The pandemic
has shown that factors such as stability and reliability when it comes to
supply chains, are key to product availability. Our assureds are now also
looking at different logistics, transportation and insurance solutions to
manage this constantly evolving risk.”
