Marine insurers are facing growing pressure to address modern slavery and forced labour risks in underwriting as scrutiny from regulators, investors and clients intensifies.
A new information paper from the International Union of Marine Insurance (IUMI) warned that failing to identify exploitative practices in global supply chains could expose insurers to reputational harm and potential legal consequences.
“Modern slavery is impacting an estimated 28 million people,” said Lars Lange (pictured), IUMI secretary general. “Marine insurers must be aware of the potential consequences of insuring unethical clients and consider integrating ethical underwriting practices to support responsible business.”
The paper highlighted that forced labour, human trafficking and exploitative recruitment continue to affect sectors closely tied to marine insurance, including shipping, fishing, agriculture, textiles and manufacturing. Distant-water fishing and seafaring are flagged as particularly high-risk.
For insurers, this means strengthening ESG frameworks within underwriting. IUMI suggested requiring clients to show compliance with international labour standards, such as Maritime Labour Convention, embedding human rights clauses into risk appetite statements and considering contractual measures like exclusions or conditions precedent tied to labour practices.
The warning comes amid lawsuits against major seafood and agriculture companies accused of benefiting from forced labour, as well as tightening legislation such as the UK Modern Slavery Act and the EU’s Corporate Sustainability Due Diligence Directive, both of which extend accountability to financiers and insurers.
The maritime sector itself remains under scrutiny, with the International Maritime Organization reporting a record number of seafarer abandonment cases in 2024, alongside growing reports of denied shore leave.
Lange acknowledged insurers’ indirect role and the practical limits of detecting abuses in complex supply chains. But he said proactive action was essential.
"Insurers are one step removed from these operations and it is important to acknowledge that they often face practical limitations in detecting these abuses given their indirect role and the complexity of global supply chains”, said Lange. “However, as far as possible, marine insurers should take a proactive stance - not just to protect reputations, but also to align the insurance industry with global human rights standards.”
Industry observers warn that inaction could leave insurers vulnerable to claims disputes, loss of investor confidence and tougher regulatory oversight, at a time when ESG performance is increasingly shaping capital allocation and client relationships.
