Ocean hull market faces growing risk pressures despite global premium growth, reports IUMI

The global ocean hull insurance market is facing increasing risk pressures, despite the apparent growth in overall premium base, according to Ilias P.Tsakiris, Chair of the Ocean Hull Committee at the International Union of Marine Insurance (IUMI) annual conference in Rotterdam. While the global hull premium base reached USD 10.5 billion in 2025, marking a 9.4% increase from the previous year, Tsakiris cautioned that headline growth figures do not fully represent the situation.

Fleet growth, higher vessel values, and exchange-rate fluctuations all contributed to the premium increase, but this does not necessarily indicate stronger rates or improved underwriting profitability. The hull market remains soft despite the premium growth.

Premium growth was consistent across major regional markets, with Europe and Asia experiencing increases of approximately 6-7%. Latin America, although growing, still represents a smaller portion of the global hull market. Global fleet growth, though slower than in previous years, is expected to reach about 3% by the end of 2026.

The aging merchant fleet, with an average age of 22.4 years, adds pressure to hull underwriters due to the need for more frequent maintenance and repair. Additionally, higher claims costs stem from spare parts shortages, particularly for older vessels.

Port State Control activities in various regions are also creating additional pressure, potentially leading to more inspections, detention, and repair exposures. Loss ratios remain relatively favorable in several major markets, with Europe at approximately 60% on an incurred basis and Asia at around 50%. Latin America reported a lower paid loss ratio, partially due to premium-reporting effects, while the US reported around 50%.

However, these figures should not be directly compared for underwriting profitability, as they are based on different accounting methods.

Beyond core market indicators, Tsakiris emphasized the ongoing impact of geopolitical developments on global shipping patterns. Although the impact of tariffs was less severe than initially anticipated, geopolitical tensions in the Middle East have forced vessels to alter their routes. Although weather-related claims have not yet risen significantly, piracy activity has resurfaced, and insurers must address this emerging risk seriously.

The relationship between hull and war risk insurance is also evolving, as war-related losses are increasing, making it challenging to maintain the cross-subsidization model that previously supported hull business. This creates pressure on insurers to balance premium adequacy against a broader and increasingly complex risk landscape, resulting in a growing fleet, elevated vessel values, geopolitical shifts, and potential significant attritional losses, all contributing to a softening market.