The insurance industry has emerged from a year of massive losses driven, above all, by natural catastrophes. The hurricanes Harvey, Irma and Maria resulted in up to US$ 100bn in damage, while California wildfires destroyed property worth more than US$ 10bn. Multiple lines of marine insurance business were affected, including yachts and cargo, as well as ports and terminals.
Marine insurers are obliged to pay their part of the bill. During the latest round of renewals, premiums rose in marine lines affected by losses as well as those unaffected – signalling that the soft market has definitely come to an end.
I expect this improved market environment to persist in 2018. This assessment is further backed by encouraging prospects for the global economy this year.
We expect a globally synchronised boom in consumption, investment and international trade for industrialised countries and emerging markets. And this is good news for marine insurance, as premium income correlates with growth in trade volume and value.
Yet there are still downside risks for global economic growth that cannot be neglected.
These include geopolitical risks, problems in the euro zone and the protectionist trade policy of the USA. The latest US tariffs imposing heavy burdens on imports from China, the EU and other economies bear the concrete risk of triggering massive trade conflicts between the world’s leading economies.
In the current promising climate, it is time for marine insurers to concentrate on adapting to the changes revolutionising the world of shipping and insurance. Digitalisation and automation in logistics will advance to a new level with the Internet of Things (IoT), while disruptive technologies such as Blockchain and artificial intelligence are expected to change the face of shipping and trade. As insurers we should prepare for fundamental changes in the way we do business.
Becoming more fit for future developments means, among other things, attracting fresh talent. Our industry needs to maintain and enhance its appeal for young professionals beginning their careers. And with the right people on board, we must continually invest in new skills and qualifications to manage the rapidly changing environment our industry faces.
The marine insurance industry has proven its robustness and resourcefulness over recent years and I am confident that, as with challenges in the past, we are well equipped to hold our own and thrive in a race for talent.