Canada’s marine insurance market is flush with capacity and aggressively competitive – but if the country’s trade patterns shift away from their traditional US focus, the bottleneck may not be capital. It may be expertise.
That is the warning from Michael Wright (pictured), head of marine at HDI Global SE – Canada, who believes Canada’s success in a more globally oriented trade environment will hinge on how quickly the industry can deepen its technical skills.
Wright said Canada maintains a very deep relationship with international markets and already has strong marine capacity in place, both from domestic insurers that specialize in marine business and from offshore companies licensed to operate in the country.
For now, he describes the market as “incredibly competitive,” with “a lot of capacity in the marketplace.” But he also sees signs that some of the largest insurers are already positioning for a different future.
He said some of the larger companies are increasingly looking to invest in the marine market because Canada’s trade agreements with the US may change, and new agreements with other international partners are likely, noting that while you can drive to the US, trade with countries like China inevitably moves by sea.
He said that as more cargo starts moving by ocean and air, Canada’s marine market will expand, and that this growth won’t be limited to cargo cover alone, since a wide range of marine insurance products will be affected by shifts in trade.
Wright expects conditions to remain competitive on price and capacity – but believes the real stress point will be technical underwriting and broking capability.
“I believe market conditions in Canada will still be competitive, but I also think that there will be a greater need for technical underwriters who have a strong understanding of the wordings that they’re offering,” he said. “And the enhanced risks that we might see in doing business with non-US importers.”
Asked whether Canada is equipped, skills-wise, to respond to that need, Wright did not hesitate.
He said it is “absolutely the most important” factor in the success of Canada’s marine insurance community to have a high level of technical expertise – including a solid grasp of Incoterms, terms of sale, and the real risks associated with ocean shipments.
He pointed to “things such as general average,” which he said “marine folk are very much aware of, but outside of a small group of people, general average is a marine term that people don’t quite understand.”
The complexity extends well beyond individual concepts. Wright argued that underwriting modern cargo and logistics risks requires fluency in the entire contractual and legal ecosystem that surrounds a shipment.
He said the required expertise also extends to understanding contracts of carriage and bills of lading, including the respective obligations of the shipper, cargo owner, carrier and logistics intermediaries such as freight forwarders. All of these parties, he noted, operate under “laws such as the Hague-Visby rules, the Hague rules, the Carriage of Goods by Sea Act, the Carriage of Goods by Water Act, the Hamburg rules, the Rotterdam rules,” which will play an important role in how Canadian trade evolves beyond its relationship with the United States.
Beyond trade contracts and liability regimes, Wright stressed that policy‑wording nuance can have real financial consequences when something goes wrong.
For ocean cargo, many Canadian insurers still rely on variants of the Institute Cargo Clauses – but not always the same ones.
“We currently use a form of what we call the Institute Cargo Clauses for ocean shipments. It’s a series of wordings that include war, strikes, and a number of other extensions of coverage,” Wright said. “There are two different versions. There’s one written in 2009 and one written in 1982. Which one do you use? Do you know which one is applicable to the client’s risk?”
That is not an academic question. Wright pointed to the bankruptcy of Hanjin Shipping, once one of the world’s largest container lines, as a moment when fine print suddenly mattered.
“That really came to be when Hanjin, a major ocean carrier, went bankrupt, probably well over 10 years ago,” he said. “The difference between the 2009 wording and the 1982 wording really came to bear because there was a distinct difference in coverage.”
