Ocean Hull Market Softens Amid Risk Pressures Despite Premium Growth, IUMI Reports

The global ocean hull insurance market continues to soften, even as the overall premium base shows growth, Ilias P. Tsakiris, Chair of the Ocean Hull Committee, stated at the International Union of Marine Insurance (IUMI) annual conference in Rotterdam. IUMI's latest research indicates that the global hull premium base reached USD 10.5 billion in 2025, marking a 9.4% increase from the previous year, as reported by Hellenic Shipping News Worldwide.

However, Mr. Tsakiris cautioned that this headline growth figure does not reflect improved market conditions or underwriting profitability. He noted that fleet growth, elevated vessel values, and exchange-rate movements have contributed to the increase in premium income, rather than stronger rates. Despite the increase, the underlying hull market is still softening.

Premium growth showed consistency across major regional markets, with both Europe and Asia experiencing increases of approximately 6-7%. Latin America recorded stronger growth but represents a smaller share of the global hull market. Global fleet expansion is continuing, albeit at a slower pace than in previous years, and is projected to reach about 3% by the end of 2026.

Ageing Fleet and Claim Pressures

With vessel scrapping remaining subdued, the global merchant fleet is ageing, reaching an average age of 22.4 years. This trend is creating additional pressure for hull underwriters, as older vessels typically require more frequent maintenance and repair. Shortages of spare parts, particularly for older tonnage, are also contributing to higher claims costs. Increased Port State Control activity in several regions is adding further pressure, potentially leading to greater inspection, detention, and repair exposures.

Reported loss ratios vary across markets due to differing accounting bases. Europe's 2025 estimate is approximately 60% on an incurred basis, including an allowance for claims not yet reported. Asia's figure of around 50% reflects paid claims, while Latin America reported a lower paid loss ratio, partly influenced by premium-reporting effects. The US reported approximately 50% for 2025. IUMI clarified that these figures are subject to claims development and are not directly comparable measures of underwriting profitability.

Geopolitical Risks and War Insurance Link

Beyond core market indicators, Mr. Tsakiris highlighted the ongoing influence of geopolitical developments on global shipping patterns. While the impact of tariffs has been less severe than initially anticipated, areas of tension and conflict, particularly in the Middle East, have necessitated vessel re-routing. Although a significant rise in weather-related claims has not yet materialised, this represents an additional risk factor. A resurgence of piracy activity was also noted as a serious concern.

Mr. Tsakiris further pointed out the evolving relationship between hull and war risk insurance. Historically, some hull business portfolios have been partially cross-subsidised by war premiums. However, this model is becoming increasingly difficult to sustain as war-related losses rise. This situation is adding pressure to an already competitive hull market, requiring insurers to balance premium adequacy against a broader and increasingly complex risk landscape. Mr. Tsakiris concluded that the market is characterised by a growing fleet, elevated vessel values, a changing geopolitical landscape, and the potential for significant attritional losses, underscoring a softening market combined with a wider portfolio of risk.