Marine market will see ‘more restrictive capital’ and ‘narrower policies’ in 2023 – Concirrus

Next year will potentially see the hard market in marine lines persist as the impact of the war in Ukraine continues to be felt.

This was according to Andrew Yeoman, chief executive of Concirrus. Speaking exclusively to Insurance Times, Yeoman explained: “We enter 2023 going through one of the most difficult reinsurance renewal seasons, with the days of wide coverage and cheap capital firmly behind us.”

He added that the impact of Russian president Vladimir Putin’s seizure of aircraft in response to international sanctions would “undoubtedly” have a negative impact on the marine market in 2023.

“It’s likely that we’ll see more restrictive capital, narrower policies and a market that has less options, potentially leading to a continued hard market,” he explained.

However, Yeoman added that it is not always possible to predict future claims and vessel behaviours based on past behaviour.

He said: “Covid-19 led to significant changes in supply and demand across the globe and in extreme cases – such as the cruise sector – saw entire vessel segments coming to a standstill.”

The Russia-Ukraine war has also had a knock-on effect on the global economy, creating the potential for extreme claims inflation.

As a solution, Yeoman suggested that building lead indicators into machine learning models that facilitate the deployment of capital would help give market players an edge when predicting future market dynamics.

ESG implementation

Environmental, social and governance (ESG) issues became increasingly important across the marine sector in 2022 - for example, around topics such as emissions and crew welfare.

Despite this, Yeoman said: “Very few players in the market are actively building these topics into underwriting processes to initiate meaningful change.

“2023 will see more widespread embedment of ESG compliance into underwriting guidelines and, ultimately, into pricing decisions in the longer term.”