Marine insurers affected by global recession

As the global recession affects shipping activity, marine insurers are faced with decreased demand and an increase in piracy, according to A.M. Best. Impeding free trade could have a negative impact on the global economic recovery, Deidre Littlefield, president of the International Union of Marine Insurance (IUMI), warned during the IUMI conference in Bruges, A.M. Best reported. “According to Littlefield, in 2008 world trade had experienced the worst slump since 1984, and was looking at a contraction of 1.4% in 2009.” A.M. Best reported. “She pointed out that too many ships were chasing too little cargo and that due to a glut of vessels, ship builders have to face up to the fact that some of the planned builds could be delayed or even cancelled.”Rising marine loss ratios could be seen over the near year by hull, cargo, liability and offshore energy insurance markets, said Deiter Berg, a member of the IUMI’s facts and figures committee, as reported by A.M. Best. But, Berg added, the yacht, protection and indemnity markets might see lower loss ratios, A.M. Best noted. A range of influences could affect marine insurers, including cost of capital, ratings and regulation; economic factors such as competition, capacity and investment returns; as well as environmental factors such as the impact of climate change and pandemics, Berg noted, according to A.M. Best.