State of the Insurance Market Report
2025 Initial Outlook and 2024 Wrap-Up
Marine
As we enter the last half of 2024, the marine property markets continue to be challenging. Carriers operating in the recreational marine space continue to seek to reduce their exposures. This reduction involves restrictions for businesses in catastrophe (CAT) zones, increasing rates, reducing limits, and further limiting terms and conditions.
While standard markets still write some marine business, this is on a highly selective basis and often as an accommodation to 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 property exposures.
Market Conditions
The recreational marine industry overall has slowly regained its footing with marine markets experiencing a boom of boat purchases during the COVID-19 pandemic. Inventory/capacity issues throughout the supply chain have eased, while demand continues, as buyers seek boats with more power and luxury options, better safety features, and improved energy and fuel efficiencies. Interest rates related to financing costs have contributed to tempering industry sales growth.
Coverage Considerations
Recreational marine insurers continue to be laser-focused on the unfavorable loss trends since 2020 and CAT data modeling showing increased frequency and severity of storms. These factors are resulting in reduced overall capacity, reduced limits of liability, and restricted terms and conditions across many coverage lines.
The impact of the 2024 hurricane season is likely to be a major driver in the go-forward position for all those involved in the commercial marine insurance markets for the remainder of 2024, into 2025, and beyond. The 2024 hurricane season was predicted to be one of the most active and intense in recent history. National Oceanic and Atmospheric Administration (NOAA) analysis found 2023 to be the Earth’s warmest year in the organization’s 174-year climate record. NOAA’s annual global climate report revealed ocean and land surface temperatures 2.12 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 2024, the overall marine marketplace continues to remain hard with fewer insurers participating in the market and more restrictive underwriting guidelines for most business classes. However, some rate moderation for select marine businesses, especially those without coastal exposures is beginning to occur for select accounts.
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 |
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| Marinas & Marine Business: |  |
+12% to 18% |
| Yacht Clubs & Sailing Orgs: | |
+12% to 18% |
Market Conditions
Importers and exporters in today’s global marketplace face a range of true risk challenges. These include ongoing global geopolitical tensions, ever-evolving difficulties with supply chain disruptions, port strikes, and ‘virtual’ theft rings utilizing highly strategic methods of targeting valuable types of cargo. The average stolen shipment value per event more than doubled to $281,757 in the first quarter of 2024 according to CargoNet. Overall, we note:
- Increased insurer capacity within the Marine Cargo Throughput marketplace has generally caused a modest reduction on transit premium levels for cargo owners since fourth quarter 2023 and this trend continues during 2024. Stock inventory premium increases have gradually softened with the London market showing slightly more aggressive reductions and continue to remain very competitive against property markets.
- A growing number of clients choosing higher deductibles levels to soften inventory premium increases particularly for CAT-exposed areas.
- Similarly, the U.S. marketplace has responded favorably to supporting more Quota Share placements to reduce or replace Excess All Risks and CAT inventory programs in London to achieve greater premium savings while enhancing existing profit share agreements for clients’ benefit.
Recommendations
Cargo owners should start the renewal process 90 days out to ensure all Marine renewal documentation received is thoroughly vetted and fully completed.
This time frame will allow all parties involved in the transaction to understand the clients’ current and future needs/requirements and review same to determine appropriate next steps. These include exploring possible structural changes in program design and/or modifications to contract wording, review/challenge ongoing market relationships, and where necessary reach out to additional markets to ensure the optimum result for our clients.
Theft of Target Commodities and/or easily disposable goods are at record levels within the shipping Industry due to the drastic uptick in fictitious pickup and in-transit theft that is taking place.
All manufacturers/shippers should already have robust security standards already in place to realize reasonable rating and deductible levels.
Those Cargo owners shipping refrigerated and/or frozen product must consider a proactive approach by including temperature recording devices to protect their own interest and not Vessel owners.
Check inventory values at regular intervals to determine suitability of storage capability and adequacy of current inventory limits.
Container storage of inventory is a persistent ‘red flag’ issue for market underwriters and needs to be addressed as soon as possible.
Rate Forecast
Marine Cargo Rate Forecast |
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| Marine Cargo: |  |
-4% to -7.5% (with exceptions based on type of products shipped, loss history etc.) |
| Marine Inventory: | |
Minimal increases for All Risks / 5% increase and higher for certain CAT areas |
Market Conditions
For Ocean Marine and Bluewater oceangoing ships, there is plenty of Hull & Machinery capacity in Scandinavia, London, and the Continental markets with additional capacity arriving by way of new MGAs in London. The additional capacity is putting downward pressure on rates. We expect to see 2.5% to 5% premium reductions for fleets with good loss records as well as 18 to 24-month policies being offered. We expect 18-month options to be fixed, but longer periods requiring review clauses. 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 UK ships may find it difficult to find coverage. The February 20, 2025, protection and indemnity (P&I) renewals will most likely see further rate increases in the 5% range despite excellent investment returns. Although most clubs are showing positive loss records, there is still concern over which direction the Baltimore Key Bridge liability case will take. 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
Begin the renewal process at least 60 days before expiration.
Explore 18–24-month policy periods.
Rate Forecast
Ocean Marine & Blue Water Rate Forecast |
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| Ocean Hull: | |
-2.5% |
| Ocean P&I: | |
+5% |
Market Conditions
- Hull & Machinery and Marine Liabilities: The Hull insurance market has settled down after five plus years of 10% + annual rate increases. As expiry premium renewals are being obtained, most renewals see no more than a 3% to 5% rate increase.
- 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 Re-Insurance Market is driving most Marine Excess renewal pricing to double, triple and in some cases even higher charges 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.
Recommendations
Start the renewal process early
Develop readily disseminated data documentation to demonstrate both maintenance and loss control operations.
Rate Forecast
Coastal Marine & Brown Water Marine Rate Forecast |
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| Hull: | |
Flat to + 5% |
| 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.
Download the Report
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.