The International Union of Marine Insurance (IUMI) has raised concerns about the shifting dynamics of global trade. Speaking at IUMI’s annual conference in Singapore, President Frédéric Denèfle warned that marine insurers are entering the end of seamless globalisation, with rising conflicts and trade tensions reshaping international commerce.
Fragmentation of Global Trade Routes
Denèfle highlighted how military conflicts including the war in Ukraine and unrest in the Red Sea have forced vessels to avoid high-risk regions, leading to longer and more expensive shipping routes.
Inland transport and nearshoring are also making a comeback, signalling a reorganisation of supply chains. However, these changes demand significant investment in shoreside infrastructure, while increased transport costs may drive up inflation worldwide.
Implications for Marine Insurance
According to Denèfle, the end of globalisation does not signal the end of trade but rather its transformation. Traditional shipping and logistics are giving way to more fragmented, diversified systems. This shift presents fresh challenges for insurers, particularly in risk assessment, underwriting, and innovation.
Yet, Denèfle stressed that the marine insurance market remains resilient, with strong financial ratings and high levels of trust from clients. A downturn in international trade, however, could pressure premium volumes, requiring a recalibration of policies.
Future Trends in the Shipping Industry
Denèfle predicted that the emerging shipping landscape will be more adaptive and technology-driven. Marine insurers must prepare for trends such as artificial intelligence in risk management, the growth of alternative trade corridors, and the rise of new maritime markets. While these developments mark the end of an era of seamless integration, they may pave the way for a more strategically diverse and resilient shipping industry.
Marine insurers are facing a historic transition as the world moves away from globalisation toward fragmented, regionally influenced trade systems. While challenges abound, the industry’s strength and adaptability position it to remain relevant. By embracing innovation and preparing for evolving trade dynamics, insurers and shipping companies alike can navigate this uncertain but opportunity-rich future.
Did you subscribe to our Daily newsletter?
It’s Free! Click here to Subscribe!
Source: Lloyd’s List
