Marine insurance companies continue to raise prices on lower reinsurance capacity, and insurers are also struggling with rising political tensions in various international shipping areas, sources say.
Insurance companies are also introducing policy exemptions in response to the COVID-19 pandemic and increasing health problems for ship crews.
"We have a market that is hardening, as the reinsurance market demands more through exemptions and increased premiums," said Stephen Harris, senior vice president, naval and cargo practice with Marsh JLT Specialty, a unit of Marsh Ltd. in London.
“The marine insurance market across the board in every industry is strengthened after a long period of price declines and coverage creeps. Ship and cargo insurance is rising with changes in coverage, says Michael Burle, London-based shipping manager for Liberty Specialmarkets, a unit in Liberty Mutual Insurance Co.
Insurance companies move to exclude COVID-1
"There are many new COVID exceptions," said Lars Gustafson, New York-based CEO of Arthur J. Gallagher & Co .: Marine Practice. Lloyds and British insurance companies began to exclude COVID-19 specifically for renewals or even viruses wider "where they have not before ," he said.
"Many of the exemptions we see insurers coming out with now are CDEs – exemptions for communicable diseases," said Harris.
Such exemptions were introduced as COVID-19 exemptions but have been extended to exclude losses related Bacteria and other infectious diseases, he said. The exceptions include such as infected cargo and delays in deliveries.
In addition to exceptions, the marine market sees reduced reinsurance capacity.
said Ryan O & # 39; Connor, New York-based North American Regional Wagon Manager at Allianz Global Corporate and Specialty, a unit of Allianz SE.
The reduction in reinsurance capacity has led insurers to reduce primary capacity, he said.  Where previously an insurer may have offered $ 10 million, $ 20 million or $ 40 million in primary limits, it can now take several insurance companies to put together the same limit, said Mr. O & # 39; Connor.
Rising tensions from military and trade friction also affect insurers' views of the marine market.
"When we see photographs of the U.S. Navy sailing through the South China Sea, we realize that it is causing tension, and the tension is what insurers do not" like, "Harris said. "Given that they already have a tougher attitude, it will not help at all."
The United States has implemented the right to navigation exercises in the South China Sea, and sanctions against Iran have plummeted in the Middle East.  "Tensions in the South China Sea and the Middle East have been long-lasting and still are. "Tensions are rising in the Middle East and the insurance industry has seen significant events occur in the last 18 months," said Burle.
"Marine insurers must always follow current events and be vigilant," said Mr. O & # 39; Connor of Allianz. [19659002TheinsuranceindustryhasalsobeenunderpressurefromtheUSStateDepartmenttodomoretopreventtheflowofoilfromVenezuelainviolationofUSsanctions
The COVID-19 pandemic has also made it more difficult to secure crews for ships. "19659002] Testing crews when they ride ships has become a challenge for the maritime industry," Gustafson said. "
" For ship operators, they have a hard time shutting down crews, "Gustafson said. U.S. inland waterway crews are usually on board for two to four weeks and international crews can serve for several consecutive months.
"Crew management and their welfare", has been one of the challenges facing the shipping industry, Mr. Burle sa.
Continuously changing COVID-19 hotspot maps both in the US and abroad have complicated the replacement of crews for shipowners. "Logistics to coordinate crew changes has been a major problem for our customer base," said Gustafson
The result has been crews who served on ships for extended trips to reduce the number of people cycling on and off ships, he said.
More insurance and risk management news about the coronavirus crisis here. Catalog