State of the Insurance Market:
2025 Outlook
Marine
In the first quarter of 2025, the marine property markets are showing signs of stabilizing. Carriers operating in the recreational marine space are seeking to reduce exposures in catastrophe (CAT) zones. The 2025 marine market is still seeing a slight uptick in increased rates, reduced limits, and limited terms and conditions but far less so than in 2024.
While standard markets are still writing some marine business, the focus is on a larger, balanced, non-CAT portfolio. This market condition has resulted in the excess and surplus markets emerging as the most consistent option for coastal marine property exposures.
Market Conditions
The recreational marine industry is seeing many smaller boats and yachts being sold which is a continuation of the trickledown effect of the unusual boom of boat purchases during the COVID-19 pandemic. Inventory and capacity issues throughout the supply chain have eased, and the demand is normalizing. There seems to be suggestions that larger yachts are being realistically priced to sell, which could be related to financing costs and increased interest rates.
Coverage Considerations
Recreational marine insurers continue to be laser-focused on the unfavorable loss trends from prior years and CAT data modeling showing increased frequency and severity of storms. These factors result in reduced overall capacity, market consolidation, reduced limits of liability, and restricted terms and conditions across many coverage lines.
The impact of the recent hurricane seasons is a major driver in the go-forward position for all those involved in the marine insurance markets. The 2025 hurricane season is once again forecasted to be active and intense. National Oceanic and Atmospheric Administration (NOAA) analysis found 2024 to be the Earth’s warmest year in the organization’s 175-year climate record. NOAA’s annual global climate report revealed ocean and land surface temperatures 2.32 degrees Fahrenheit above twentieth-century levels.
Liability limit restrictions in general, along with decreased capacity for excess liability and directors and officers (D&O) liability are driving placement challenges and price increases for many marine risks. Underwriting guideline changes have resulted in a reduced appetite for insuring boat builders with less than five years of documented experience. Builder’s risk policies for vessels under construction highlight the property and marine capacity shortages. In 2025, the overall marine marketplace continues to remain hard with fewer insurers participating in the market and more restrictive underwriting guidelines continuing for most business classes. However, some rate moderation for select marine businesses, especially those without coastal exposures is beginning to occur for select accounts. The marine excess market will continue to experience rate pressure and tighter underwriting, especially if claims activity is present. Quota share and caps on limits offered are becoming much more common.
Recommendations
Begin the insurance process early to have adequate time to successfully navigate the dynamic marine insurance marketplace.
Plan for longer lead times and higher premiums, particularly when looking to secure higher-limit policies.
Work with an experienced marine broker who can create a custom insurance and risk management program through analysis of the existing insurance program, review of exposures and risk factors, and identification of current and future coverage needs.
Look for insurer stability. Many insurers have tried and failed to penetrate the marine market. Align with a carrier with a long-term commitment to the marine industry.
Dedicate time and resources to develop and implement risk control programs and loss prevention plans, including workplace safety and education programs, expanded alarm systems, and detailed storm preparedness plans. This is critical to mitigate risks and reduce claims and can contribute to potential premium considerations on the carrier side.
Rate Forecast
Recreational Marine Rate Forecast |
||
| Marinas & Marine Business |  |
+12% to +18% |
| Yacht Clubs & Sailing Orgs. | |
+12% to +18% |
Market Conditions
Importers and exporters face numerous risks in today's global marketplace including:
- Increased logistics costs: Cargo shippers are experiencing heightened costs due to war rating surcharges in regions like the Red Sea and Gulf, increasing costs downstream within the supply chain.
- Impact of U.S. tariffs: Newly enacted tariffs by the U.S. government on established trading partners contribute to financial uncertainty for importers, exporters, manufacturers, and distributors. To mitigate the effects of U.S. tariffs, businesses should review their current insurance policies focusing on:
- Valuation models: Ensure accurate valuation to reflect true risk.
- Inventory limits requirements: Align limits with actual needs to avoid excess premium costs.
- Annual exposure base: Regularly assess exposure levels for proper coverage.
Insurance Market Trends
The marine cargo insurance market is softening, allowing for potential negotiations on policy deductibles.
Cargo theft has seen a sharp rise, with 2024 experiencing a 27% increase in theft incidents compared to 2023, averaging over $202K in value per theft. This trend is expected to continue into 2025, with organized crime adapting their tactics.
Recommendations
To capitalize on favorable market conditions, Cargo owners should:
Start the renewal process early: Initiate the renewal process 90 days in advance to ensure thorough vetting of all marine renewal documentation.
Collaborate with stakeholders: Work closely with all parties involved to assess risk profiles and align current and future insurance needs.
Develop a targeted market strategy: In this volatile environment the need to develop a strategy to navigate the competitive insurance landscape is critical to the buyer; careful planning, strategic market positioning and proactive risk management are essential for importers and exporters to navigate challenges and leverage opportunities in the current cargo insurance market.
Rate Forecast
Marine Cargo Rate Forecast |
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| Marine Cargo Insurance Rates |  |
-7.5% to -10%* Anticipated decrease, with variations based on product types and loss history. |
| Marine Inventory Rates | |
-5% to -10%* Expected decrease for all risks, though some catastrophe areas may see flat rates or increases of 5% or more |
Market Conditions
For Ocean Marine and Bluewater oceangoing ships, there is plenty of hull and machinery capacity in Scandinavia, London, and the Continental markets with additional capacity arriving by way of new managing general agents (MGAs) in Lloyd’s of London. The additional capacity is putting downward pressure on rates. We continue to see 2.5% to 5% premium reductions for fleets with good loss records. Policy periods longer than twelve months are not as widespread as anticipated. Current market players expect to see heavy pressure from the new capacity which needs to be fed.
War risk coverage is still available for Red Sea and Indian Ocean transits with pricing changing daily depending on conditions. U.S. and U.K. ships may still find it difficult to find coverage. The February 20, 2025, protection and indemnity (P&I) renewals were concluded in the 5% range as expected. Although most are showing positive loss records, there is still concern over which direction the Baltimore Key Bridge liability case will take and how it will affect 2026. There have also been sizeable container ship losses as well as growing jury awards around the world which will affect the clubs’ results going forward. The general economic uncertainty, interest rate cuts, and the many conflicts taking place around the world will weigh on investment returns.
Recommendations
To capitalize on favorable market conditions, Cargo owners should:
Begin the renewal process at least 60 days before expiration.
Explore 18-month policy periods.
Rate Forecast
Ocean Marine & Blue Water Rate Forecast |
||
| Ocean Hull | |
-2.5% to -5% |
Market Conditions
Hull and machinery and marine liabilities: The hull insurance market has settled down after five-plus years of +10% annual rate increases. Expiry premium renewals are being obtained with small reductions as well.
The P&I market is seeing increases slightly higher than the hull market with average quoted charges no higher than 7% increases year over year, primarily driven by underwriters’ concern over crew injury claims.
The marine liability market continues to have newly seen stability, as expiry pricing levels year over year. Underwriters’ keen appetite for marine liability business fuels this relatively soft pricing.
Domestic vessel pollution markets such as the Water Quality Insurance Syndicate offer renewal rating consistently as expiry.
All accounts with commercial auto or coastal property exposures are seeing steep premium rate increases due to the well documented nuclear jury verdicts and CAT storm losses.
The dwindling capacity in the excess reinsurance market is driving most marine excess renewals to experience considerable increases. Accounts with severe loss experience are seeing pricing double, triple and in some cases even higher increases than what was seen just three years ago.
A few new domestic marine facilities are seen as a positive force for future moderation of pricing along with the impact a perceived reduction in inflation may generate.
Litigation against corporate leaders was common throughout 2024 and continues into 2025, driving greater demand for strong directors and officers (D&O) coverage. Businesses and executives need more comprehensive protection now due to:
- Regulatory scrutiny
- High-interest rate environment
- Political/economic uncertainty amidst a new administration shareholder activism
- Securities class action lawsuits leveled off after a three-year period of decline
- Emerging risks like cyber incidents
- Intensified environmental issues
- Increased bankruptcy filings
- Banking industry turbulence
Recommendations
Take the initiative to understand insurance requirements, regularly assess risks, and maintain open and transparent communication with insurers and brokers. Doing so will stave off potential issues and position yourself well in the insurance market.
Leverage favorable market conditions with stable rates and increased capacity. Consider adding additional limits to your coverage or diversifying your insurance carriers. These moves can provide added protection in case of unexpected cyber threats or management liability issues.
Adhere to regulations by prioritizing compliance with new SEC regulations, especially regarding cybersecurity disclosures and fair valuation practices. Investing in robust risk management strategies and controls can lead to better insurance terms and conditions.
Fortify cyber protection since small and mid-market companies are prime targets for cyberattacks. Criminals assume these organizations have fewer cyber controls. Bolster cybersecurity measures to help defend against threat actors.
Stay current by keeping informed of industry trends, emerging risks, and regulatory changes to help you make informed decisions about your insurance coverage and risk management strategies.
Rate Forecast
Coastal Marine & Brown Water Marine Rate Forecast |
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| Hull | Flat to minus reductions | |
| P&I | |
+5% to + 7% |
| Marine Liabilities | Flat to + 3% | |
| Marine Excess | |
+7% to +15% |
Decades of leadership in the marine insurance market give us the access, experience, and expertise needed to manage your complex marine exposures and best protect your marine risks, on and off the water.
Our industry and product line specialists have collaborated to provide an update on current trends and market conditions.
We invite you to explore their insights by downloading our latest State of the Insurance Market Report.
