The global marine insurance market is weathering one of its most complex chapters yet, beset by geopolitical turbulence, ballooning cargo exposures, and the mounting hazards of a shipping system under strain.
“There’s ample capacity globally,” said Kevin Wolfe, senior vice president of ISC’s Marine Division. But from fire-prone lithium-ion batteries to geopolitical flareups in the Strait of Hormuz, insurers are facing risks that are not only multiplying—but evolving.
“Global tensions occur from time to time, and we’re used to it in the marine environment,” Wolfe added. “It’s just the nature of what we deal with for centuries.”
Despite headlines about supply chain volatility, insurers say the core ocean cargo market remains robust. “The trade that goes on now really continues,” Wolfe said. Even with lingering questions around tariffs and geopolitical maneuvering, general consumer goods and commodities are still moving—and insured.
But the real heat, so to speak, is coming from emerging risks. Lithium-ion batteries, increasingly found in electric vehicles and energy storage systems, are creating what Andrew Kinsey, director of marine risk consulting, called “a challenge... on the supply chain as currently configured.”
“We are now shipping the cargo, and yet we don’t have a really robust firefighting methodology,” Kinsey warned, referencing recent high-profile vessel fires. “There’s a cart before the horse thing.”
These cargo hazards are converging with growing concerns about vessel size and port infrastructure. “We have such large container vessels that are stressing the rest of the supply chain infrastructure,” Kinsey said, listing out tugs, terminals, and inland transport systems as pinch points.
Events in the Gulf have elevated concern around war risk coverage and so-called “dark fleet” vessels—aging, often uninsured tankers skirting sanctions and operating without transponders. Following the June 17 collision of the Adalynnand Front Eagle near Khor Fakkan, insurers are on edge.
“We’re seeing a firm refusal to insure ships connected to the U.S., U.K., or Israel—price is no longer a factor,” David Osler, Lloyd’s List insurance editor, told CNBC. Coverage is becoming not just expensive—but unavailable for some.
“From a pure war risk exposure... we address the clients that are actually involved or moving goods in [conflict zones],” Wolfe said. “Do we need to surcharge the rates for war risk, which we do to certain parts of the world...? Has it reached a point where we have to suspend war coverage?”
Even navigation itself is under siege. “We’ve dealt with these types of disruptions on the supply chain,” Kinsey noted, “but when we start to look at the choke point transits and disputed areas... these are game changers.”
Spoofing of GPS signals and automatic identification systems (AIS) has already led to collisions, including one in mid-June in the Strait of Hormuz. “Those are going to be things that will need to be considered and evaluated for risk going forward,” Kinsey said.
While vessels grab headlines, land-based storage and accumulation risks are also pushing policy terms to their limits.
“You can’t have $100 million [of] value in a location and expect to get Natcat coverage for an inexpensive cost,” Wolfe said. “With climate change... you have to address that as an underwriting company.”
Massive cargo values on a single container ship—some large enough to generate 40 miles’ worth of railcars—make the idea of single-point catastrophe more than just theoretical. “Aggregation is an issue,” Wolfe said.
And it’s not just natural catastrophes. “Fictitious pickup or brokering of loads” is another rising threat, Kinsey added. Insurers are now “really revisiting the warehouse inspection protocols” and “trying to address the theft in transit issue.”
“The old adage applies,” Wolfe said. “‘Cargo at rest is cargo at risk.’”
Multinational shipping clients with global exposures face their own challenges.
“You could have a large multinational account that might have 20 or 30 different local policies,” Wolfe explained. “The paperwork involved for us to get that all put together... takes a little longer.”
As shipping lanes shift—whether due to war or logistics—cargo is exposed to new and unexpected conditions. “Containers that were stuffed for a normal Red Sea transit are not then prepared to go around the Cape of Good Hope,” Kinsey said. In the winter months, this leads to risks like mold, condensation, and cargo shifting.
Yet according to both men, one of the greatest hurdles remains misaligned expectations between insurers, clients, and brokers.
“The best solution... is when you have a receptive client and broker and us as ISC Marine can all get together,” Wolfe said. “An open dialogue is really critical to a successful relationship.”
Kinsey agreed, emphasizing the importance of ground-level insight: “Procedures are best written from the deck plates up... In many cases, procedures are being driven from the top down and there’s not enough input from the people doing the work.”
Despite the shifting landscape, neither Wolfe nor Kinsey suggests that the sky is falling. The market, though anxious, is not broken. Capacity remains. Coverage remains. But the cost—financial, operational, and strategic—is climbing.
“This stuff, it goes on all the time,” Wolfe said of global conflict. “You go back to the Falklands, Ukraine, Asia. It’s just the nature of what we do.”
Still, insurers, clients, and brokers alike will have to continue recalibrating. “We have to continue to work on that,” Kinsey said of cargo segregation, emergency response, and new risk technologies.
Because while the sea may always move, the risks floating upon it have never looked quite like this.
