A surge in green infrastructure projects and energy storage shipments is exposing critical gaps in marine underwriting, according to senior leaders at ISC’s marine division. While global cargo capacity may appear sufficient, the volume and complexity of today’s risk landscape are challenging how marine insurers evaluate, price, and structure coverage.
“From a pure insurance capacity point of view, there's ample capacity globally,” said Kevin Wolfe (pictured left), senior vice president of ISC Marine. While general consumer goods continue to move, the underwriting spotlight has shifted. “Power generation, green energy… solar plants, mining risk. LNG is a big one, particularly here in North America.”
Project cargo – large, high-value equipment destined to become permanent infrastructure – is now among the most volatile and capacity-intensive segments. ISC currently deploys more than $100 million in capacity to this area, Wolfe noted, with demand only accelerating. “I do see a lot of growth, not just here in North America, but in other parts of the world as well.”
One of the most urgent risk concerns, according to Andrew Kinsey (pictured right), ISC’s director of marine risk consulting, is the rise of lithium-ion battery shipments. Fires sparked by these batteries have already caused vessel losses, and marine firefighting capabilities have not kept pace. “We are now shipping the cargo, and yet we don’t have a really robust firefighting methodology,” Kinsey said.
High-profile incidents – such as the recent fire that consumed a roll-on/roll-off vessel for more than two weeks – have elevated the risk profile significantly. “It’s not just the EVs. The battery energy storage systems create a challenge,” Kinsey said.
These hazards are magnified by the shipping industry’s growing reliance on ultra-large container vessels. The sheer scale of these ships increases the total value-at-risk and places intense pressure on port infrastructure. “If you were to offload all those containers from one of those ships and put it on a railroad, the train would be 40 miles long,” Wolfe said.
Kinsey emphasized that ports are reaching capacity limits across the board – from tugs to dredging to inland distribution. “We really do need to address that portion so we can get that last mile and avoid the congestion that we see plaguing ports,” he said.
Natural catastrophe coverage for goods in storage has also become one of the most hotly contested areas in marine policies. “You can't have $100 million value in a location and expect to get NatCat coverage for an inexpensive cost,” Wolfe said. Increasing climate volatility is forcing underwriters to revisit legacy risk models. “You used to see someone say a 100-year event... they seem to be happening much more frequently.”
Meanwhile, the accumulation of insured values aboard individual vessels is driving more policies to be syndicated among multiple underwriters. “Even in the general markets... you’re seeing more of a slip play,” Wolfe said.
Marine loss control teams are also intensifying their focus on theft prevention and warehouse inspections, as cargo crime – particularly in-transit theft and fictitious pickups – continues to pose a material threat. “We take a close look at what procedures are in place to help ensure that the cargo... is well handled,” Kinsey said. Wolfe put it plainly: “Cargo at rest is cargo at risk.”
The complexity increases further for multinational clients with global logistics footprints. “You could have a large multinational account that might have 20 or 30 different local policies that have to be issued,” Wolfe said. These administrative hurdles slow down renewals and strain resources on both the broker and carrier side.
Geopolitical risks and route changes are also challenging underwriting assumptions. Kinsey cited the recent detour from the Red Sea to the Cape of Good Hope. “Containers that were stuffed for a normal Red Sea transit are not then prepared to go around the Cape of Good Hope in the winter,” he said.
He warned that too many risk mitigation strategies are still driven top-down, with limited input from front-line operations. “Procedures must reflect the actual environment that they're being implemented in... Many times we see this being driven from the top down and there's not enough input from the people doing the work.”
Both Wolfe and Kinsey stressed that the most effective approach is proactive collaboration between insurers, brokers, and clients. “We’re not here to tell the insured what to do,” Wolfe said. “But we’re here to offer them suggestions and observations as to what we've seen previously, what didn't work, what may work.”
Kinsey agreed that early, ongoing conversations make the biggest difference. “One size does not fit all when we’re looking at multiple destinations and environments for shipping,” he said.
