The marine re/insurance market is grappling with increased risks linked to the aging global fleet and growing exposure from electric vehicle (EV) transport, according to Miller's latest half-year update.
Age remains a central factor in the likelihood of total loss, with structural fatigue, outdated systems, and aging machinery contributing to rising claims frequency and severity.
Miller noted that several indicators support the link between vessel age and increasing marine incidents. Data from Lloyd’s List Intelligence shows more than 2,200 casualty incidents recorded annually since 2021.
From 2022 to 2024, DNV reported a 22% increase in marine incidents, primarily due to machinery failures and aging fleets. Its 10-year review further found a 42% rise in casualty incidents between 2018 and 2024, with more than half of all 2024 incidents involving vessels over 20 years old.
The industry has also seen a notable rise in high-value claims. Seventeen Pool claims exceeding US$10 million were reported to the International Group, with costs tripling compared to the same point over the previous two years. Miller attributes this increase, in part, to the expanding number of older ships in operation.
At the same time, abandonment of seafarers has hit record highs, with the International Maritime Organization recording 310 cases in 2024 – a 118% increase over 2023 and nearly 20 times higher than figures reported a decade ago.
The growing frequency of fires aboard car carriers, particularly those transporting EVs, is another focal point of the report. Miller highlighted that PCTC designs – characterized by tightly packed multi-deck configurations – pose specific challenges for fire suppression, especially when dealing with thermal runaway events linked to lithium-ion batteries.
Firefighting challenges are intensified when operators lack clarity on the number and placement of EVs onboard, creating operational blind spots. While EVs may not always cause the initial fire, their batteries can produce intense, self-sustaining heat once ignited.
These risks, when evaluated against current global fleet loss trends, suggest elevated exposure from car carriers and Ro/Ro vessels. Miller’s analysis points to a sharp increase in partial and total losses in this vessel category, underscoring the difficulty re/insurers face in quantifying and managing these evolving risks.
Casualty response is also being shaped by geographic variables. As loss adjusters often note, location plays a critical role in outcomes, particularly in high-latitude environments such as the Arctic.
In 2022, 182 cargo ships operated in the Arctic Polar Code area, alongside 114 bulk carriers and 78 cruise ships. Miller noted that the number of voyages in this region has grown, driven by a combination of longer seasonal windows and a surge in Russia-China trade following the Ukraine conflict. Crude oil and LNG shipments on the Northern Sea Route have been central to this uptick.
Red Sea exposure is compounding risk profiles. Following renewed Houthi attacks on commercial shipping, war risk premiums have surged. Coverage costs for vessels transiting the Red Sea have risen sharply, with rates reaching as high as 1% of a ship's value – up from 0.4% earlier in the year. For a vessel valued at US$100 million, this translates to a premium of up to US$1 million, significantly impacting operating margins.
According to Miller, carriers initially benefited from rerouting to avoid the region, temporarily bypassing concerns about overcapacity. However, recent data indicates a recovery in Suez Canal traffic, with May 2025 transits averaging 36-37 per day – up from the earlier low of 20, but still below the 72-75 vessels seen prior to the onset of Houthi attacks.
The resumption of ceasefire agreements could push operators to return more traffic to Suez, reigniting capacity pressures.
The marine re/insurance market is concurrently experiencing a multi-year downturn in hull and machinery premiums. Miller reported that new market entrants, drawn by recent years of profitability, have introduced more competition, leading to modest premium reductions.
While underwriting strategies today may differ from the last soft cycle, the pressure to maintain business share has led incumbents to reduce rates to stay competitive.
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