The global marine insurance market size was valued at USD 27,324 million in 2021. It is expected to reach USD 36,406 million by 2030, growing at a CAGR of 3.24% during the forecast period (2022-2030). Marine insurance coverage helps mitigate risks due to unfortunate incidents or accidents that damage the property or environment and cause loss of life. It is intended to reduce the economic hammering incurred by a policyholder in the event of an accident, natural hazard, or other catastrophes. Generally, a marine insurance policy is designed mainly for ship owners, cargo owners, and charterers. Marine insurance is extensively employed to cover risks like cross-border divergences, climate vulnerabilities, encounters with pirates, and other dangers related to these circumstances. These circumstances cause considerable monetary loss for ship and cargo owners.
Moreover, marine insurance delivers transporters with enormous litheness while selecting coverage appropriate to their particular deal and covers personalized necessities of the cargo and ship owners in the market. Certain aspects, like amplified responsiveness in the direction of marine insurance internationally and rushing forward in the execution of analytics and telematics, push the marine insurance market growth. On the other hand, speedy expansion in the integration of IoT in marine insurance and the unexploited perspective of emerging economies is projected to present profitable opportunities for marine insurance solution providers in the approaching time.
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Growing Awareness and Demand
As marine insurance covers almost all the risks associated with it, there is a visible demand for this insurance globally. Apart from protecting the risk, marine insurance also assists in the smooth running of trade actions. According to a leading knowledge-sharing institution, Uniglobal, approximately 85% of international trade is passed through the sea, and tons of cargo ships operate regularly. This extensively contributes to the worldwide economy. Furthermore, enormous losses like harm caused to ships, cargo vessels, and terminals are rapidly faced by ship owners, cargo owners, and charterers because of massive marine business operations.
And so, it becomes challenging to manage these risks & losses in the marine business. Therefore, marine insurance plays a significant role in overcoming these losses. Hence, these massive losses and advanced attentiveness of cargo in warehouses, ports, and transit force the market demand for marine insurance worldwide.
Speedy Execution of Analytics and Telematics
Telematics technology is very significant in the marine field as it helps cargo and ships get information concerning real-time tracking and monitoring of telematics information regarding the movement of insured vessels. On the other hand, analytics implicated in the system helps in the computational analysis of data. Additionally, an accomplishment of telematics and analytics endow the capability to correctly examine existing and upcoming risks in the marine business.
Furthermore, it permits underwriters to understand the level of risk, identify the contributing elements in the losses, and consequently resolve marine insurance claims. In addition, telematics and analytics engross the convention of wireless voice and data communication systems. It offers functions like vessel monitoring, serving warning notifications in urgent situations, system supervising, stolen vehicle recovery, and other features. Hence, these primary advantages and highly developed solutions delivered by telematics and analytics drive the marine insurance market growth.
Increase in Marine Insurance Premium
The marine insurance premium has a propensity to augment in the market due to the rise in the disparity between premium earnings, covered risk, and claims expenses. Furthermore, the marine insurance market growth is also affected due to ongoing global trade development and exchange rate fluctuations. On the other hand, rapid changes in oil prices also go on, forcing premiums from the offshore energy sector, which is an additional significant aspect restricting the market growth.
Insurance Providers Integrating IoT in Marine Insurance
Prominent market players are uninterruptedly integrating IoT systems in their existing marine insurance product lines to make further improvements. This system aids in forecasting and supervises preclusion losses and makes claims processing easier. Insurance providers are profoundly spending on this system as it helps manage engine performance, CO2 emissions, navigation, and cargo supply chains. This directly speeds up streamlined assistance of marine insurance. Hence, various players' integration of IoT in marine insurance will likely drive market growth during the forecast period.
The global marine insurance market is analyzed across the coverage, distribution channel, end-users, and region.
As per the coverage, the fragments are hull & machinery, cargo, marine liability, and offshore energy insurance.
The cargo insurance segment will hold the largest share and grow at a CAGR of 3.36% by 2030. This type of insurance is employed to safeguard shipments from damages and theft caused physically. It guarantees that the worth of goods is confined against probable losses during marine transportation. On the other hand, cargo insurance protects ship owners from the economic loss that might have occurred due to damaged or lost cargo. It covers the total loss brought upon the cargo due to certain happenings like natural disasters, vehicle accidents, cargo abandonment, customs rejection, acts of war, and piracy. It also eases the claiming procedures of insurance. These factors are likely to produce profitable opportunities for the cargo insurance market.
The hull & machinery insurance section will hold the second-largest share. Damages and losses, particularly to the “Hull of the ship,” which is the outer body of the ship, are covered by a hull & machinery insurance policy. Hence, any damage to the ship's body simultaneously, as in transportation or shipment, comes under hull insurance. This insurance furthermore offers coverage against risks like damage or loss to the ship's body, loss due to defective fittings, machinery damage, and others. This insurance uses highly developed technologies like blockchain, IoT, sensors, and telemechanics. As the body of the ship is more prone to accidents, this insurance sees significant growth in the market.
The distribution channel-wise segmentation includes wholesalers, retail brokers, and others.
The wholesalers’ section will have the most significant shareholding, growing at a CAGR of 2.46% by 2030. This segment holds a major market share because this insurance provider works as a mediator between a retail dealer and an insurance transporter. Wholesalers provide several services to ship owners related to risk management. For instance, it helps ship owners recognize the probable causes of loss and prevent cargo damage. The primary factor attributing to the expansion of the marine insurance market in this segment is the boost in rapidity and competence of delivering the insurance policy, as well as an increase in the requirement to simplify the claim settlement procedure.
The other segment will hold the second-largest share in the market. Others comprise online channels, individual agents, and corporate agents. These agents use specific sophisticated data analytics tools like tableau to progress the claim management service, envisage the customer necessities, and boost customer preservation. These are the primary reasons that drive the market growth.
Based on the end-user, the marine insurance market is segmented into ship owners, traders, and others.
The section of traders holds supremacy in the market and is expected to grow at a CAGR of 4.25%. While transporting goods from one country to another through maritime way, traders face certain risks. Marine insurance policy offers coverage to traders to protect them from those risks. Constant changes in climate situations increase the chances of accidents that destroy transporting goods. This has increased demand and adoption of the marine insurance policy, providing financial protection against destroyed goods.
The ship owners’ segment will hold the second-largest share in the market. Marine insurance policies cover ship owners against almost every type of unfortunate calamity. They help them manage risks associated with those calamities like accidents, damage to property, and loss of life. As this insurance covers the equipment of the ship owners against the dangers caused by natural disasters, it faces an increase in demand leading to market growth.
As per the region, the global marine insurance market is segmented into North America, Europe, Asia-Pacific, and LAMEA.
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Europe and the Asia Pacific will lead the regional market
Europe will likely command the regional market and develop at a CAGR of 2.42%. Europe strongly relies on the marine sector to produce economic output and jobs. In nations like the UK, Germany, and France, the marine industry supports an estimated 9,00,000 jobs. As a result, marine insurance is crucial for ship owners transporting commodities by water to handle business risks.
Several ships and cargo owners in this area get marine insurance to protect themselves from liabilities related to the cargo they are caring for and handling. As a result, marine insurance offers cargo ship owners freight liability insurance to cover such obligations in the territory of Europe. Additionally, marine firms are in charge of transporting commodities that need insurance to cover loss or damage while in transit, whether they are transported locally or abroad. Experts in marine insurance and seasoned risk managers thus provide customers with direction, information, and support while traveling. These are some of the most important market trends in Europe.
The Asia-Pacific is forecasted to hold the second largest share of USD 12,909 million by 2030, developing at a CAGR of 4.26%. The region's demand for marine insurance has grown due to the movement of commodities between imports, exports, and distribution centers, as well as advances in commercial links with other countries. Marine insurance also provides risk management options for logistics, commercial hulls, ports, cargo terminals, and supply chains and solutions for equipment, machinery, and property liabilities. As a result, the Asia-Pacific region is seeing a rise in the need for marine insurance.
Increased use of marine insurance by shipping companies and carriers fuels market expansion in the Asia-Pacific region. An essential element spurring the growth of the marine insurance market is the expansion of marine insurance players operating throughout the region due to increased competition among insurance providers. Additionally, in 2021 the Indian insurance regulation and development authority (IRDAI) established a protection and indemnity (P&I) club in the maritime insurance sector. The Indian National Ship Owners Association (INSA) and the authorities worked together on the initiative, which helped the marine insurance industry in the nation flourish. Because it offers ship owners protection and indemnity insurance, this is anticipated to present good potential for expanding the marine insurance market.