The global ocean hull insurance market continues to soften despite apparent growth in the overall premium base, according to Ilias Tsakiris, chair of the International Union of Marine Insurance's (IUMI) Ocean Hull Committee, speaking at IUMI's annual conference in Rotterdam.
IUMI's latest research puts the global hull premium base at $10.5 billion in 2025, a 9.4% increase on the previous year, with Europe accounting for 51.3% of that total.
Tsakiris cautioned that the headline figure doesn't tell the full story.
"A 9.4% increase in premium income needs to be viewed in context," he said. "Fleet growth, elevated vessel values and exchange-rate movements all contribute to that increase. Headline premium growth should not be mistaken for stronger rates or improved underwriting profitability. Despite the increase in premium income, the underlying hull market continues to soften."
Tsakiris was blunt about what's actually driving the premium figures upward. A bigger fleet, higher vessel values and a weaker US dollar have all pushed the number up "without a single rate going up," he said.
"It is not a hardening market; it's a softening market that looks like a growing one," Tsakiris added.
He said existing insurers are defending market share as new capacity continues to enter the market, giving brokers alternative options and contributing to repeated reductions at renewal, adding that the pressure to retain and grow premium income appears to be influencing risk selection, a pattern he warned against, saying "retaining income should never come at the cost of weaker technical underwriting."
Premium growth across major regional markets has been relatively consistent, with both Europe and Asia recording increases of roughly 6-7%. Latin America grew more strongly, though it remains a considerably smaller share of the global hull market.
Global fleet growth continues, albeit at a slower pace than in previous years, and is expected to reach approximately 3% by the end of 2026. With vessel scrapping remaining subdued, the merchant fleet is ageing steadily, with the average vessel now being 22.4 years old.
Older tonnage requires more frequent maintenance and repair, while spare parts shortages, particularly for older vessels, are contributing to higher claims costs. In the underlying claims data IUMI presented, machinery accounted for 47% of claim numbers and 43% of costs, with Tsakiris noting that claims in the $10,000 to $500,000 range are becoming more frequent, exactly the kind of attritional cost pressure that erodes technical profitability even without a single catastrophic loss.
Increased Port State Control activity in a number of regions is adding a further layer of pressure, raising the risk of inspection, detention and repair exposure for owners and their hull underwriters alike.
Reported loss ratios remain relatively favourable in several major markets, though the figures are compiled on different accounting bases and shouldn't be treated as directly comparable measures of underwriting profitability.
Europe's 2025 estimate sits at around 60% on an incurred basis, including an allowance for claims not yet reported, appearing to return toward more normal levels following the post-COVID period. Asia's figure, at around 50%, reflects paid claims specifically and represents an increase on 2024. Latin America reported a lower paid loss ratio, partly influenced by premium-reporting effects, while the US reported approximately 50% for 2025, continuing a pattern of improvement. Recent years remain subject to further claims development, meaning these figures could still move as outstanding claims mature.
Tsakiris said the impact of tariffs on the hull market has been less severe than originally anticipated, which he called positive, adding that this has not materially affected the market. But he flagged continuing pressure from areas of tension and conflict, particularly in the Middle East, which have forced many vessels to re-route.
"Although we are yet to see any meaningful rise in weather-related claims, this represents an additional risk of which we must remain conscious," he said. "We are also seeing a resurgence of piracy activity, which must be taken seriously."
He also pointed to a structural shift in how hull and war risk insurance interact. Hull business has historically been partially cross-subsidised by war premiums in some portfolios, but Tsakiris said that model is becoming harder to sustain as war-related losses rise, including from Red Sea-related attacks that have already affected 2025 figures and are expected to weigh even more heavily on 2026.
That dynamic adds further pressure to an already competitive hull market, forcing insurers to balance premium adequacy against an increasingly complex risk landscape.
Tsakiris concluded: "Our market is characterised by a growing fleet, elevated vessel values, a changing geopolitical landscape and the potential for significant attritional losses. Whilst we are seeing growth in global premium, the underlying story is one of a softening market combined with a wider portfolio of risk."
