The marine hull and machinery market remains highly competitive despite mounting technical and geopolitical pressures, according to recent analysis from Gallagher Specialty.
Higher asset values, an aging fleet and inflation in repair costs are weighing on underwriters even as pricing competition persists.
Global hull premiums rose 3.5% in 2024 to US$9.67 billion, while fleet values increased 4% to US$1.54 trillion, according to IUMI data cited in the report. The average fleet age now exceeds 22 years, reflecting in part elderly tankers in shadow fleets moving sanctioned cargo and a strong tanker market that has delayed scrapping.
Aging machinery is a key concern as inflation in steel, labour and yard costs lifts the severity of damage and total loss claims. Gallagher noted that several vessels have been declared total losses this year, with detentions and disputes also generating claims outside traditional high-risk zones.
London remains the focal point for hull competition, with established carriers and MGAs pursuing growth across preferred vessel classes. New hull capacity from Cincinnati Global Syndicate 318 and K2 Rubicon is expected to keep competitive pressure elevated into 2026, leaving less-favoured segments facing continued rating strain.
The latest findings sit against a wider shift in marine risk, as conflict and political tensions force vessels to reroute around exposed corridors and lengthen voyages.
Market commentary this year has pointed to war risk premium rates on some routes rising from about 0.4% of a ship’s value to as high as 1%, alongside higher fuel and charter costs and growing focus on how an aging global fleet copes with longer, more complex trading patterns.
Major 2025 casualties in the Gallagher update include fires aboard MV Pumba in the Red Sea in July, Marie Maersk off West Africa in August and Grande Roma in the English Channel in October. The month-long grounding of Thamesborg in the Arctic in September was also cited as a significant event.
War risks remain volatile. A US-brokered Gaza ceasefire prompted the Houthis on Nov. 11, 2025, to conditionally suspend Red Sea attacks and lift their blockade of Israeli ports, allowing more vessels to return to the route, but insurers view the stability as closely tied to continued ceasefire observance.
Somali piracy activity has resurfaced, with mothership-enabled approaches and the brief hijacking of the tanker Hellas Aphrodite, whose crew stayed safe in the citadel. While no casualties have been reported, Gallagher said kidnap-and-ransom premiums are rising in response to the threat environment.
In parallel, product design is evolving as brokers and insurers respond to overlapping war, terrorism, political risk and cargo exposures on key routes.
Some markets are turning to combined facilities that bundle cargo with war, terrorism and political risk in a single package, supported by the use of defined breach zones to signal when additional war-risk terms and pricing apply as ships enter designated high-risk areas.
