Aging Vessels and Global Instability Contribute to Softening Marine Insurance Market
Despite a 3.5% increase in global hull premiums to USD 9.67 billion in 2024, the ocean hull insurance market is experiencing a “soft environment,” according to Ilias P. Tsakiris, Chair of the International Union of Marine Insurance (IUMI) Ocean hull Committee.Tsakiris spoke at the IUMI annual conference held in singapore.
This apparent contradiction stems from a confluence of intensifying risk factors, including an aging global fleet, increasingly severe losses, geopolitical instability, and the complexities introduced by the ongoing energy transition.
The total value of the global fleet has risen 4% to an estimated USD 1.54 trillion. Though, premium revenue remains concentrated geographically, with Europe accounting for 53% of premiums, Asia/Pacific for 35%, and other regions contributing 12%. This concentration creates “intense competition” in key regions and leaves the market with “notable vulnerability” shoudl a major loss occur in a primary premium center.
“Even though in headline numbers, losses have not surged, loss ratios remain under pressure as of higher costs, more expensive incidents and an ageing fleet that is harder to repair,” Tsakiris explained.
The age of the world fleet is a significant concern. Currently, the average age is 22.6 years, with approximately 35% of ships exceeding 25 years old and 61% being over 15 years. Worryingly,new orders for replacement vessels represent only 16% of the existing fleet,and ship scrapping rates are at multi-year lows. Data from 2024 shows that vessels 20 years or older were involved in 52% of all incidents, while ships 25 years or older accounted for 41% of incidents. Tsakiris described the aging fleet as “a quiet but powerful driver of claims.”
The shift towards alternative fuels also introduces new risks. Approximately 25% of the 3,466 newbuilding orders placed in 2024 were designed to operate on alternative fuels, a figure that has risen to 31% for orders placed to date in 2025. Tsakiris noted that “novel fuels like methanol, ammonia and hydrogen introduce completely new hazard profiles,” adding that insurers will be covering more complex machinery with limited repair history, while the overall fleet age continues to increase. “The energy transition is not just a green story – it is a risk story.”
Geopolitical events are further complicating the marine insurance landscape. The Ukraine-Russia war and security concerns in the Red Sea have forced vessels to reroute via the Cape of Good Hope, increasing transit times, costs, and exposure to heavy weather. This has led to increased engine failures, weather damage, and higher salvage costs.
Sanctions have also contributed to the growth of a “shadow fleet” representing roughly 17% of the global fleet. Tsakiris cautioned that while “war premiums are higher,” controlling the accumulation of risk is becoming more difficult, and the human cost – including detentions, kidnappings, and crew abandonments – continues to rise.
Separately at the conference, IUMI’s Data & Digitalization Forum highlighted the potential of artificial intelligence in marine insurance, with Chair Rahul Khanna stressing the importance of ethical implementation of the technology.