Claims costs in the shipping industry have risen significantly. The cost per ship has climbed by around 20% for Scandinavian insurers.
According to the Oslo-based Association of Nordic Marine Insurers (Cefor), the accelerated price development of recent years is now also measurably reflected in the average claims costs for marine hull insurance. In its latest semi-annual report, the association points to a clear upward spiral in the cost of claims from 2022 and 2023.
Claims cost insurers up to US$60,000
For the past year, the average claim amount per insured vessel is over US$60,000, according to Cefor’s database. In the years 2016 to 2021, the value had fluctuated around US$50,000. In 2022, it then rose to around US$55,000 with a noticeably steep cost trend in the second year after the claim was reported.
According to initial cost estimates, the upward trend appears to have come to a halt in the first six months of this year. For a reliable assessment, however, it is still necessary to wait for subsequent notifications and reservations from Cefor members over the coming quarters.
The data from the Nordic association is attracting attention in the industry worldwide, as the member companies – including Gard, Norwegian Hull Club and Swedish Club – co-insure around a third of the global fleet. The cost increases come at an unfavourable time for the risk carriers, as capacities in the maritime hull market have been increasing again since last year and premium rates are coming under pressure.
According to the data, the average claims frequency has remained stable. According to Cefor, the frequency in relation to all insured ships was around 17% in the first half of the year, the same as in the two previous years. The frequency is, therefore, significantly lower than in the years before Corona. (mph)
