The marine hull and machinery insurance market is facing a tough year ahead. Despite intense competition among insurers, rising ship values, aging fleets, and increasing repair costs are creating challenges for underwriters.
In 2024, global premiums for marine hull insurance climbed 3.5% to nearly $9.7 billion, while the overall value of the world’s fleet grew by 4%, reaching $1.54 trillion. On average, ships are now over 22 years old. Many older tankers, including those in shadow fleets, continue operating due to high demand and delayed scrapping. This aging fleet adds pressure because older machinery often leads to more severe damage and costly claims.
The cost of repairs is also climbing. Rising prices for steel, labor, and shipyard services mean claims are becoming more expensive. Several vessels have already been declared total losses this year. Claims are not only increasing in traditional high-risk areas but also in places where risks were previously lower.
London remains the hub for hull insurance competition. Established companies and managing general agents (MGAs) are expanding across preferred types of vessels. New players like Cincinnati Global Syndicate 318 and K2 Rubicon are entering the market, which is expected to keep premium rates under pressure in 2026. Less popular vessel segments may continue facing tough pricing conditions.
The risks for marine insurers are also shifting due to geopolitical tensions and conflicts. Shipping routes are changing as vessels avoid dangerous regions. This rerouting increases voyage lengths and fuel costs. War risk premiums on some routes have jumped from about 0.4% of a ship’s value to as much as 1%. Insurers are also paying more attention to how the aging fleet handles these longer, more demanding trips.
2025 has seen several major marine incidents. Fires broke out on the MV Pumba in the Red Sea in July, Marie Maersk near 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 a significant event.
War risks remain unstable. A ceasefire brokered by the US in Gaza led the Houthis to pause attacks in the Red Sea and lift their blockade of Israeli ports on November 11, 2025. This allowed more ships to use the route again. Still, insurers warn that safety depends on the ceasefire holding.
Piracy is also a growing concern. Somali pirates have become active again. They used motherships to approach vessels and briefly hijacked the tanker Hellas Aphrodite. Thankfully, the crew stayed safe in a protected area on board. Still, insurance premiums for kidnap and ransom are rising to reflect the threat.
In response to these overlapping risks—from war and terrorism to political unrest and piracy—brokers and insurers are adjusting their products. Some now offer combined policies that cover cargo along with war, terrorism, and political risks in one package. These deals often include “breach zones” that set special terms and prices when ships enter known high-risk areas.
The marine insurance world is clearly in a challenging spot, balancing competition, rising costs, older fleets, and growing global risks. All eyes will be on how the industry adapts to keep ships and cargo protected in the years to come.