testata inforMARE
25 September 2023 - Year XXVII
Independent journal on economy and transport policy
05:51 GMT+2
FORUM of Shipping
and Logistics


The Marine Insurance Markets in 2004

2004, a mixed year for marine insurers
2005, a year full of dangers!

Hull and machinery
Cargo market
The P&I Clubs
War risks - Political risks
Market organisation
Legal developments

The reduction in the number of major casualties, which characterised 2003, did not repeat itself in 2004, which saw a significant increase in the frequency and the average cost of the latter. The very healthy standing of the freight market and shipping in general led to a considerable increase in shipping activity, but also of the accidents linked to navigation.

A fragile marine insurance market and more and more concentrated

In this market, particularly favourable to the insured parties of the shipping world, the insurers seem forever subject to the erosion of their profit margins. Apparently the marine insurance market seems profit averse, since over the last ten years it has caused a number of large bankruptcies. The number of 'run off' companies has become so important that we can now speak of a real 'run off market'.

The proportion of companies which have stopped underwriting between 1997 and 2003 are:

  • 42 % of the marine syndicates of Lloyds,
  • 38 % of companies on the London market,
  • 60 % of companies on the European market,
  • 67 % of insurers of the American marine market.

However the capacity of the international market has never been as high as in 2004. Lloyds of London registered for 2004 a record underwriting capacity. Nonetheless it should be emphasised that, in an attempt to help stabilise a maritime and shipping insurance market, still looking for a good balance and in order to 'correct' it, Lloyds is proposing to lower the capacity in 2005 by some 9 %.

Hull and Machinery: a steadying of the increases  
In our 2003 report, we mentioned a slowing down at the end of the year of the rate increases that have been prevalent since 2000. In fact, 2004 would probably have only allowed insurers to maintain an upward pressure on their clients who were showing negative statistical results.

In 2004 competition increased considerably, encouraged by the new capacities notably coming from Russia, South Korea, and Poland. A strong flow of new investors, particularly in London and in Scandinavia, combined with these new capacities, helped stabilise the level of premiums.

The insured and their brokers can be pleased with the stabilisation of premiums for performing owners, but it would be dangerous for the quality of the Hull and Machinery market to see it drop again to lower levels, which would discourage some insurers who are still trying to balance their results!

For a lot of insurers who have voiced their opinion in the specialised press, as well as at the IUMI in 2004, the increases of the last 4 years are still considered inadequate and some see the end of the upward cycle as being a critical turning point. The rate increases have been very patchy according to the companies and despite some impressive percentage, the increase in premiums has been restrained and leaves no room for comfort.

The arrival of new capacities could be explained by the desire of certain re-insurers to push the 'regional' insurers and/or the less specialised towards underwriting international hulls, in order to avoid a too strong concentration of capital in the hands of the 'leading underwriters', who are becoming stronger and less numerous. Specialised insurer brokers are thus having to question as to which line of action to follow:

- to encourage additional supply by proposing the new capacities to the detriment or in addition to traditional insurers (the current leading underwriters could then get discouraged and abandon this sector which is sometimes considered too cyclical) - to concentrate their placings with the traditional markets or insurers taking the risk of losing their client who naturally is looking for the most competitive option!

With a world Hull and Machinery premium volume in 2003 of around $3 billion, the main markets are the following:

Japan: 377,080
UK (Lloyds): 348,140
Norway: 337,400
France: 333,192
USA: 298,987
Italy: 258,681
UK (IUA): 194,700
Spain: 166,743

Ship's hulls under construction

In general, newbuilding and repair yards have been heavily penalised as a result of fires, producing severe losses in this sector: the comparison of claims/premiums has resulted in nearly 250 % over the last three years. The 'Pride of America' casualty, which occurred on January 13th 2004 while under construction in the Bremenhaven shipyard, has been the most important: the claim is estimated at $ 228 million.

In conjunction with the premium increases, prevention measures are now imposed systematically by insurers.

Cargo market insurance  
Competition has remained fierce on the main domestic markets for the coverage of goods carried for the own account of producers. This is also the case for large industrial projects. Nonetheless this sector produces positive results and the market has kept its tariffs stable.

In this type of risk there has been a diversification in the insurance offered, with on one hand the disappearance of traditional players due to effects of concentration, and on the other hand the arrival of new solid participants proposing top level financial capacities and technical skills.

With the most speculative risks notably that involving trading, the cargo insurance market is becoming more internationalised and some Dutch companies are taking a preponderant part of it.

Protection and Indemnity Clubs  
Taken altogether, results have been in the red over the last 6 years and, as a consequence, renewals on February 20th 2004 have been on the increase. As a whole, Clubs have achieved an average rise of about 10 %.

Only five Clubs (American Club, Britannia, the Japan Club, the Shipowners' Club, and Skuld) have been able to produce a profit in their technical results (before investments) and none of them were able to achieve anything substantial.

The pressure to increase premiums continues in 2005 but to a lesser extent, especially as a number of insured parties who have posted profits for their Club no longer accept the systematic increases (General Increase), even if this is in line with the basics principles of the P&I Clubs which is to be a 'mutual'.

War risks ' Political risks  
The shipping industry is having to face a growing threat: piracy. This is developing by 20 % per year and prospers in under-surveyed territorial waters, where both dangerous as well as high added value goods are transported.

However, this threat comes not only from pirates attacking merchant ships, but also from the outcome of a real maritime terrorism whose aims and intentions are far more sinister and whose potential to disrupt and disorganise the flow of international economic trade seems to have been largely underestimated.

Market organisations  
The main market places involved in international risks are organising themselves to increase their productivity.

In this respect Lloyds has launched the BPR (Business Process Reform), in order to optimise its output (delay and quality of issued papers), claims procedures and financial systems.

Through the implementation of 'Optiflux', the French marine insurance market is more modestly seeking to optimise its financial circuits, with the set up of new electronic procedures for co-insurance management.

Legal developments  
The 1996 protocol has come into force in May 2004. Based on this protocol, levels of responsibility have substantially increased, by about 150 %, although for small ships up to 500 tons the figure is close to 500 %. For the moment these limits only apply to the ten states that ratified the protocol in 1996, namely Australia, Denmark, Finland, Germany, Malta, Norway, Russia, Sierra Leone, Tonga and Great Britain.

In June 2004 during the closing session of the Vancouver Conference, the Maritime International Committee (CMI) adopted several amendments to the York and Antwerp Rules concerning General Average: salvage costs, crew wages and maintenance, for the period when the ship is in a port of refuge, will no longer be included under General Average balance.

* * *

With increased liabilities (in value, quantity and in legislation) will 2005 mark a new turning point in the maritime insurance market cycle? This is a great concern and there are already some signs of reducing premiums while specialised marine insurers and P&I Clubs continue to produce weak technical results.


Shipping and Shipbuilding Markets in 2004


In view of the entry into force of the new EU environmental rules for shipping, shipping companies communicate to customers the foreseeable entity of the superoils
The impact on the costs of shipping expeditions seems rather uncertain
Interferry, Marebonus should be adopted across Europe
Interferry, Marebonus should be adopted across Europe
Brussels / Rome
Mathieu : We ask for a pan-European ecobonus system for short sea shipping. Bordoni : RAM relaunches its role in digitalization and innovation of portuality and logistics
De Rosa (SMET) : The ZES tax credit is excluded from strategic production sectors including transport
Launch new rules to increase the competitiveness of the Virgin Islands Shipping Registry
An autonomous governing board will be set up
MSC confirms Fincantieri orders for two new cruise ships for Explora Journeys
MSC confirms Fincantieri orders for two new cruise ships for Explora Journeys
Geneva / Trieste
They will be delivered in 2027 and 2028
Presented the design of the new waterfront of the port of Piombino
The overall cost of the speeches is more than 30 million euros.
ESPO, inserting ports of transhipment close to the EU in the EU scope ETS represents only a partial solution to the problem of the loss of competitiveness of European ports
D' Agostino : The shipping companies are preparing, where possible, to exit the EU ETS
Africa Global Logistics (MSC group) obtains the management of the container port of Malindi
Africa Global Logistics (MSC group) obtains the management of the container port of Malindi
It is the main container port of Tanzania
In 2022, CO2 emissions from ships in Europe returned to pre-pandemic levels.
In 2022, CO2 emissions from ships in Europe returned to pre-pandemic levels.
New record of 135.5 million metric tons of carbon dioxide also determined by the 6% increase in the number of ships approx in EU ports
Vopak cedes three terminals for chemical products in the port of Rotterdam at Infracapital
Transaction of the value of 407 million euros
Giampieri (Assoports) : We have explained to the EU Commission why the ETS poses at risk the competitiveness of Italian ports
It must be ensured that everyone is playing the game on the same level.
Hapag-Lloyd will establish its own terminalistics division
Hapag-Lloyd Terminal Holding will be based in Rotterdam
German FRS gives up Spanish company FRS Iberia to Danish DFDS
German FRS gives up Spanish company FRS Iberia to Danish DFDS
Flensburg / Copenhagen
The fleet of eight ships and the 750 employees are passing through the Copenhagen Group.
In 2022 the market for insurance of goods grew, but the future is uncertain
In 2022 the market for insurance of goods grew, but the future is uncertain
Therrien (IUMI) : All regions have registered an increase with the exception of Asia
TX Logistik records a strong growth in demand for rail transport
Expected this year in total up to 850 trains
Le Aziende informano
C. Steinweg - GMT S.r.l., il vostro partner logistico nella regione del Mediterraneo
L'azienda ha sede a Genova come ufficio regionale del gruppo Steinweg per il Mediterraneo centrale, la Costa Adriatica e il Nord Africa ed è l'operatore leader nella logistica dei metalli in Italia
Anek Lines increases revenue and reduces losses
Anek Lines increases revenue and reduces losses
The Canea
Significant traffic growth of passengers and cars transported by fleet
Continues the relevant drop in container traffic in the port of Barcelona
In August, a total of 284mila teu (-15.4%) was handled.
German shipowners do not see good eye that MSC becomes a shareholder of HHLA
Kröger (VDR) : We hope this decision will have been taken on the basis of objective and transparent criteria
Assiterminal, well the majority and opposition amendments on the concessionaire canons and the contribution to ART
Ferrari : We obviously continue to call for the opening of a technical table for the review of ISTAT indexes
In the second quarter of 2023, freight traffic in the ports of Campania decreased by -3.2%
In Naples, -3.7%, in Salerno, -3.7%
Habben Jansen (Hapag-Lloyd) : We will not present a counteroffer for HHLA, but we could reduce the eventful volumes in Hamburg
Habben Jansen (Hapag-Lloyd) : We will not present a counteroffer for HHLA, but we could reduce the eventful volumes in Hamburg
CEO of the company thrives a transfer of part of the traffic to Wilhelmshaven
Turkish shipyard Med Marine delivers a new tugboat to the Vernicos Scafi
It is the first means of new construction of the fleet of the Greek-Italian joint venture
Kenya Ports Authority privatizes benches at ports of Lamu and Mombasa
Launched an international competition that also includes a special economic zone
Last month, freight traffic in the port of Taranto increased by 6.9% percent.
In the first eight months of 2023, a decline of -4.0%
New paints to contain the propagation of fires on ships and construction sites
Messina Group has taken delivery of its second full container ship
Has a transport capacity of 4,600 teu
Approda in Genoa the first container ship of the FIM service of HMM
Scalo to container terminal of PSA Italy
Visual Sailing List
Departure ports
Arrival ports by:
- alphabetical order
- country
- geographical areas
First meeting of the technical table on security of work in the port
Among the proposals, insert some port job profiles between the "usurante/gravest" job categories
Hapag-Lloyd will equip all of its internet connection ships through the Starlink satellite network
Success of tests started in May
In the June-August period, FedEx Group revenues fell by -6.7% percent.
Net profit marked a growth of 23.2%
Cooperation of ICHCA and PEMA to improve the safety of handling goods
Spearport, necessary to minimize red tape in ports
Botta : paper documents are an absurdity in the age of digitalization
Germany's Rhenus acquires the two terminals of the Rietlanden Terminals in the port of Amsterdam
Germany's Rhenus acquires the two terminals of the Rietlanden Terminals in the port of Amsterdam
Singapore / Holzwickede
Dutch company will be ceded in two stages by Singaporean JERA Global Markets
In August the port of Algeciras handled 424mila containers (+ 1.5%)
In the first eight months of 2023, the total was 3.16 million teu (-0.4%)
Conference on the Promotion of Health in the Port Workers of the Straits
It will be held on October 2 in Messina
Ukrzaliznytsia-RCG Agreement for the development of intermodal transport between Ukraine and Austria
In short, the testing of the transport of semi-trailers on the Kiev-Budapest line will begin.
In the first half of 2023 the revenues of the Chinese terminalist group CMPort decreased by -10.8%
Hong Kong
Container traffic grew by 0.3%
Union Pilots has strongly criticized the procedure for renewing the piloting tariffs
Bellomo : well the updating of the fares of local practical
At the MITO terminal of the port of Cagliari the first container ship coming out of a Ukrainian port
Landed 2,114 containers
The Cool Logistics Global event will be held for the first time in Italy
The event is scheduled from 10 to October 12 next in Genoa
In the first quarter of this year, the traffic of goods in Greek ports has returned to growth
However, the total was lower than pre-pandemic levels.
Last month, shipping containers handled by the port of Valencia fell by -11.7% percent.
In the first eight months of this year, the decline was -10.6% percent.
In August, container traffic in Hong Kong port fell by -9.4% percent.
Hong Kong
Decline of -15.1% in the first eight months of 2023
Last month, container traffic in the port of Los Angeles returned to growth.
Los Angeles
In the first eight months of 2023, a decline of -21.0% percent was marked
Italian Ports:
Ancona Genoa Ravenna
Augusta Gioia Tauro Salerno
Bari La Spezia Savona
Brindisi Leghorn Taranto
Cagliari Naples Trapani
Carrara Palermo Trieste
Civitavecchia Piombino Venice
Italian Interports: list World Ports: map
ShipownersShipbuilding and Shiprepairing Yards
ForwardersShip Suppliers
Shipping AgentsTruckers
Conference on the Promotion of Health in the Port Workers of the Straits
It will be held on October 2 in Messina
The Cool Logistics Global event will be held for the first time in Italy
The event is scheduled from 10 to October 12 next in Genoa
››› Meetings File
España demanda una revisión instantánea de los puertos vecinos de transbordo
(El Mercantil)
Shipping minister resigns in aftermath of ferry passenger's death
››› Press Review File
FORUM of Shipping
and Logistics
Relazione del presidente Daniele Rossi
Napoli, 30 settembre 2020
››› File
Last month freight traffic in the port of Singapore grew by 1.7% percent
The containers were over 3.3 million (+ 2.0%)
On October 2 in Lugano, the sixth edition of "A Sea of Switzerland" will be held in Lugano.
The conference will be articulated in three sessions
In August, freight traffic in Russian ports grew by 5% percent
St. Petersburg
Increase in dry goods. Decline of liquid bulk bulk
New agency of Negro families, Clavarino and Schenone to provide services to the construction of the new Genoa Dam
In August, container traffic in the port of Long Beach decreased by -15.4%
Long Beach
In the first eight months of 2023, the decline was -24.4%
New freight train service Verona-Wuppertal of Rail Cargo Group
Made three weekly rotations
Cargill yields 25% percent of the KSK grain terminal of the port of Novorossiysk
The share will be acquired by Russia's Delo
Stranded a drug trade in the port of Salerno
Detected 104 pans of cocaine and the deposit to which they were intended
Ferrante (MIT) : amendments to the European Directive 2023/959 to avoid distortions that penalise Italian transhipment ports
It would allow Gioia Tauro to be placed on the same list in which ports such as Tangeri Med and Port Said are included.
- Via Raffaele Paolucci 17r/19r - 16129 Genoa - ITALY
phone: +39.010.2462122, fax: +39.010.2516768, e-mail
VAT number: 03532950106
Press Reg.: nr 33/96 Genoa Court
Editor in chief: Bruno Bellio
No part may be reproduced without the express permission of the publisher
Search on inforMARE Presentation
Feed RSS Advertising spaces

inforMARE in Pdf