The marine insurance market is increasingly being asked to underwrite technologies, operating models and exposures that barely existed a decade ago.
From lithium-ion propulsion systems and foiling vessels to remote-operated craft and fractional ownership schemes, many of the risks entering the market are evolving faster than the historical claims data traditionally used to assess them, according to Adrian Scott (pictured), head of marine and leisure at Geo Underwriting.
"There's so many ups and there's so many downs," Scott said. "But what there is, is a lot of change going on."
Across much of the marine market, Scott said technology is becoming an increasingly important factor in how risk is assessed.
Manufacturing techniques, vessel design and propulsion systems are evolving rapidly, creating challenges for underwriters seeking to understand how new technologies will perform over time.
Foiling technology, where vessels lift above the water on hydrofoil wings to reduce drag and increase speed, is one example.
"Its controllability on the water is very, very different," Scott said, "because it's almost like it's on wings and it's flying on the surface of the water."
Production methods are changing too. Modern composite materials such as Kevlar and carbon fibre behave differently to traditional fibreglass, while 3D-printed components introduce additional complexity. The result is that repairs can become significantly more complicated and expensive than underwriters or policyholders might expect.
"If someone wanted to change the seals on a window, it's the whole window," Scott said. "Taking the window apart can result in the whole thing being damaged."
The example highlights how seemingly routine repairs can become significantly more complex and expensive. Scott said that makes careful scrutiny of liability policy wordings increasingly important, particularly around cover for items being worked upon.
Perhaps the most immediate challenge facing parts of the leisure marine sector is the growth of lithium-ion battery propulsion.
While insurers have become more comfortable with purpose-built electric vessels, Scott suggested the retrofit market presents a more difficult proposition.
Many existing boats were not designed to handle the electrical loads generated by lithium battery systems. Older wiring and cabling infrastructure can struggle with those demands, increasing the potential for severe losses.
"When these things run, the fire becomes a lot more aggressive," Scott said. "There are examples of marina fires with one boat going up but taking out four or five different boats."
The concentration of vessels within marinas can significantly amplify losses. At the same time, marina operators are beginning to confront questions around high-voltage charging infrastructure, an area where standards and risk management practices continue to evolve.
The changing nature of vessel ownership is also creating fresh challenges.
Scott pointed to the growth of fractional and syndicated ownership models, where boats are owned collectively rather than by a single individual.
"We've seen a lot of what's called pay-to-sail models," he said. "This is where it's owned by a consortium under a boat ownership club or fractional ownership."
As ownership structures become more complex, the identity of the insured and the way risk is allocated can change alongside them.
"The policyholder suddenly becomes an entity, not an individual," Scott said. "That definitely is changing the way that works."
Further ahead, Scott believes the sector may encounter some of the same cyber challenges that have reshaped other areas of insurance.
Remote-operated vessels are becoming more common across commercial marine activities, including offshore wind and tidal energy support operations. As vessels become increasingly dependent on digital systems and connectivity, cyber vulnerabilities become part of the risk equation.
GPS jamming and digital interference could render vessels uncontrollable and create hazards for surrounding maritime traffic, Scott warned.
The prospect raises questions that have become familiar elsewhere in the insurance market: how emerging technologies should be assessed, where responsibility sits when systems fail, and whether existing coverage frameworks remain fit for purpose.
Some of the most significant future liabilities may emerge from places that have historically received little attention.
Disruption in the Red Sea and the Strait of Hormuz has already altered shipping routes, with vessels spending longer at sea and travelling around the Cape of Good Hope.
According to Scott, those shifts may have consequences beyond traditional cargo exposures.
Increased vessel traffic off the South African coast has contributed to more whale strikes and wildlife damage, creating potential environmental liability questions that insurers are only beginning to consider.
"Does that lead to potentially environmental impairment damage or other liabilities attaching to ship owners over the course of time?" Scott said. "Don't know, but that's something we start to factor into our thinking."
Scott argued that the pace of change means underwriters must continue building technical knowledge alongside traditional claims-based evidence.
"The convention of insurance underwriting judgement is often based on the claims-based evidence that supports it," he said. "Deepening our understanding of those technical changes is what's going to help us be comfortable and support the changes as they move through."
The challenge for marine insurers is that many of the sector's most important emerging risks have yet to generate the historical loss experience that underwriters have traditionally relied upon. As new technologies and operating models continue to enter the market, understanding those exposures may become just as important as analysing past claims.
