Marine insurers brace for trade route shifts amid geopolitical risks

Marine insurers are preparing for changes in global trade routes and growing geopolitical risks even as fresh industry data showed the underlying market remained soft despite a rise in premium income in 2025.

Global marine insurance premium income rose 5.5% year over year to $42.6 billion in 2025, according to figures released by the International Union of Marine Insurance at its annual conference on Sept. 21. Cargo insurance accounted for 57% of global premiums, while ocean hull represented 24.7%, offshore energy 11.1% and marine liability 7.3%.

"The hull and cargo markets have shown growth in terms of premium income," IUMI President Frédéric Denèfle said. "But there is considerable uncertainty from increasing war risks, additional capacity bringing greater competition and continued inflationary pressure. This is coupled with ongoing uncertainty around free trade and global commerce."

Denèfle said insurers would need to adapt to changing trade patterns as shipping companies seek alternatives to regions affected by conflict and political tensions.

"As insurers, we must be prepared to insure tomorrow's trades and trade routes, including those being introduced to avoid areas of tension and conflict," he said. "We also need to understand the new markets that will inevitably emerge as a result of geopolitical developments."

The official's comments came as military conflicts continued to drive tankers and other types of ships to seek the safest routes in Middle Eastern waters and the Black Sea to complete their voyages, often at longer distances and boosting bunker demand and overall energy costs.

Platts, part of S&P Global Energy, assessed the additional war risk premium for crude oil loaded from Black Sea ports at $2.9 per barrel on Sept. 21, 2026, up from $0.9/b on Dec. 31, 2025.

Insurance conditions

Despite the growing geopolitical uncertainty, Denèfle said marine insurers continued to provide cover in higher-risk regions and remained committed to facilitating global trade.

The industry's statistics suggest some effects of heightened security risks are already being reflected in parts of the market. Global ocean hull premium income climbed 9.4% year over year to $10.5 billion in 2025. However, IUMI said the increase should be viewed in the context of currency movements, fleet growth and war-risk business.

"With attacks in the Red Sea, war premiums have already driven some figures in 2025, a trend that will impact 2026 even more so," IUMI said in a statement.

Global offshore energy premiums totaled $4.82 billion last year, virtually unchanged from the previous year, with growth of just 0.1%, according to IUMI.

Looking ahead, IUMI said the sector is entering a significant investment cycle driven by energy security concerns, geopolitical tensions and the transition toward lower-carbon energy sources.

The latest IUMI figures largely reflect conditions before the escalation of security concerns in the Strait of Hormuz this year, suggesting the impact of elevated Gulf war-risk premiums may become more visible in future market data.

"Although we report an increase in global premium income, 2025's reporting figures are heavily supported by exchange rate effects," Veith Huesmann, chief analyst at IUMI, said.

"The weakness of the US dollar has had a significant impact on the global figures, with major reporting currencies appreciating by around 7%-13%. Once currency effects are taken into account, the market remains soft across all major business lines, with increased capacity adding to competitive pressure in most sectors."

Jun Lin, chair of IUMI's Facts & Figures Committee, said geopolitical uncertainty remained a challenge across all marine insurance sectors.

"Geopolitical uncertainty continues to affect all marine insurance business lines," he said, adding that record levels of insurance and reinsurance capacity were intensifying competition and putting further pressure on profitability.

"Despite growth in the global premium base, significant headwinds remain across all marine insurance lines and the overall market continues to be soft."