At its annual conference in Singapore, the International Union of Marine Insurance (IUMI) reported a shift in the global offshore energy insurance market. Offshore energy insurance premiums dropped to US$4.34 billion in 2024, a 7.9% decrease from the previous year.
The decline was most pronounced in Europe. Japan, Malaysia, and Egypt saw stable or downward trends, while Norway recorded a 27% increase in premiums.
Several factors contributed to the overall contraction, including lower oil prices, competitive pressures, and increased market capacity. Utilisation rates remained high at about 80%, but retentions and deductibles were largely unchanged.
The claims environment in 2024 was mixed. There were few large losses and no catastrophic events, which reflected improved operational safety. However, attritional losses remained high, estimated at US$2 billion for the year.
Melanie Raven (pictured above), chair of IUMI’s Offshore Energy Committee, said, “We are seeing a reduction in overall premium levels, combined with increased market capacity. Profitability across the sector is under pressure. With attritional losses already running high, we must remain mindful of our exposure should a significant event occur.”
She also noted a shift in industry practices. More commercial approaches, such as auto-buying and smart follow facilities, are entering the market.
Raven stressed the need to retain technical expertise in underwriting. She said this expertise is necessary to provide robust cover and sustainable pricing.
She also pointed to growing investment in offshore renewables, especially wind farms in Asia, as a source of new opportunities. “For traditional energy underwriters, the barriers to entering the green energy space are relatively low, and this is proving a positive development for many insurers.”
The sector is also seeing the increasing role of gas as a transitional energy source. Safety improvements and the absence of major losses have supported confidence in offshore operations.
The conference also highlighted how marine insurers are increasingly turning to artificial intelligence (AI) to streamline operations. AI is now being used for automating claims, detecting fraud, improving underwriting, forecasting natural disaster impacts, and ensuring operational compliance.
This adoption is expected to foster closer collaboration between brokers and underwriters, enhancing efficiency in pricing, claims handling, and risk assessment.
Alongside technological changes, the sector is contending with increased risks due to shifting trade routes and an ageing global fleet. In 2024, more than half of marine casualties involved vessels over 20 years old, and casualty incidents have risen by 42% since 2018.
Despite these challenges, the worldwide marine insurance market reached a record premium volume of nearly US$40 billion in 2024. However, growth has slowed to 1.5%, compared to 5.9% in 2023 and 8.3% the year before, signalling increased competition and softer market conditions.
Pascal Dubois, chair of the IUMI Loss Prevention Committee, addressed delegates on the importance of loss prevention.
“The marine insurance sector has debated loss prevention for many years,” Dubois said. “Some may question whether the concept has passed its sell-by date – but in reality, it has never been more relevant.”
Dubois identified four main challenges: climate change and the transition to net zero, geopolitical volatility, technological transformation, and the need for significant investment. He cited practical measures such as rerouting vessels, drone-based surveys, IoT-enabled cargo tracking, predictive analytics, and blockchain for secure documentation.
“Prevention is about re-structuring our businesses and enhancing the way we operate,” Dubois said. He added that embedding loss prevention into daily operations will only grow in importance.
IUMI’s Loss Prevention Committee continues to share knowledge and best practices across the global maritime sector. The organisation said that it remains focused on supporting the industry as it navigates new risks and opportunities.
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