MANAGE & LEAD
COMMERCIAL MARINE : RISKS AND OPPORTUNITIES FOLLOWING MARKET UPHEAVAL
With significant losses over the last couple of years , commercial marine had started moving toward a hard market . Nevertheless , several market research firms have projected growth of $ 8 billion by 2024 .
By : Olivia Overman
The commercial marine insurance market recently started feeling downward pressure with significant losses , low rates , and inefficient processes . It began to move toward a hard market . After many years of a soft market , the pile-up of catastrophic losses from hurricanes , floods , tornadoes , political tensions in certain areas of the world , and — on top of it all — the global pandemic , changes are afoot in the commercial marine market .
“ There have been significant market losses over the last couple of years that just continue to drive home the fact that underwriters need to increase rates ,” says John Gambino , cargo manager , RB Jones Marine . “ There was a West Virginia warehouse fire for Macy ’ s inventory that was written in the ocean cargo market with a loss of $ 78 million . There was the automobile carrier , the Golden Ray , that flipped over off the coast of Georgia here in the U . S .
That was about an $ 80 million cargo loss .”
“ The losses keep happening ,” Gambino says . “ We ’ ve seen two-terminal port explosions in China and one in Lebanon due to hazardous cargo . We are still in the process of having a lot of large losses getting thrown into the entire system .”
Additionally , over the past year , capacity has dropped with numerous companies withdrawing from the market . “ With a great deal of the global marine capacity residing in London , the market has seen the impact of increased scrutiny on several marine lines , including ocean marine , ocean hull , construction , and engineering risks ,” says Drew Feldman , senior vice president , global marine business leader , CNA . “ With that said , for the majority of risks in the market , there remains ample capacity , albeit at elevated pricing .”
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