by Maria Mavroudi, founding partner of Searock Marine Insurance Brokers
2025 is shaping up to be another defining year for the marine insurance market. Despite an easing in certain premium levels, challenges persist — from geopolitical uncertainty and claims inflation to the growing influence of environmental and trade regulations. In this evolving environment, understanding the forces behind market movements is key to staying ahead.
Hull & Machinery (H&M) Insurance
The year 2025 has opened with a noticeable easing of Hull and Machinery (H&M) rates. On the surface, this appears positive for shipowners, but history reminds us that a prolonged soft market rarely serves the industry well.
The Hull and Machinery market in 2025 remains a fiercely competitive space. New capacity from both established insurers and Managing General Agents (MGAs) continues to put pressure on pricing, particularly in London, where rates have softened the most. By contrast, the Scandinavian and French markets have held somewhat firmer, reflecting their traditionally more conservative underwriting stance. While overall discipline has been maintained, competition and the drive for growth are steadily tightening margins.
According to the UNCTAD 2024 Review of Maritime Transport, the average age of the world merchant fleet reached 22.4 years in 2024. More than half of all vessels are now over 15 years old, driven by smaller, older ships and slower newbuild investment in certain segments. Container ships are an exception, benefiting from a surge in deliveries during 2023. This trend highlights the ongoing structural risks in the global fleet, particularly for ageing machinery and older units.
Recent claims trends tell a familiar story — fewer incidents, but higher costs when they do occur. Major fires, machinery breakdowns, and expensive total losses have dominated the picture. Rising costs for steel, labour, and shipyard repairs have kept average claim values high, leaving profitability across the H&M sector only just in the black.
Adding to the complexity, the fluid geopolitical environment from the Red Sea and Black Sea to the expanding shadow tanker fleet, continue to inject volatility and shape the way underwriters view and price risk.
Advances in technology, automation, and shipboard safety have certainly reduced accident frequency, improving the overall claims picture. Yet the cost side tells a different story: ship repairs are increasingly expensive due to higher steel prices, rising labour costs, and limited yard capacity. These factors are pushing up claims severity even as frequency declines.
With reinsurance also costing more, the market faces a delicate balancing act. New capacity may provide temporary relief, but fundamentals suggest that the softening is unlikely to last. As the renewal season progresses, competition remains a factor, but recent severe losses are prompting stronger underwriting responses. A firmer stance toward older units and loss-making sectors, combined with broader market recognition of underlying cost pressures, may support a gradual stabilization of the cycle.
Protection & Indemnity (P&I) Insurance
P&I continues to feel the weight of high claims inflation. Pool claims remain frequent and costly, driven by large-scale casualties and increasingly complex liabilities. While Clubs have benefitted from some recovery in investment returns, these gains are uneven and not sufficient to offset sustained claims pressure.
Many individual Clubs experienced underwriting losses in 2024/25 due to higher claim costs, but strong investment returns helped them navigate a very difficult claims environment relatively unscathed. The year saw a significant increase in the cost of serious casualties, with a higher level of claims impacting the International Group Pool. Looking ahead to the 2026 renewal, the key factor will be the trend of large claims in the current year, both in terms of frequency and value. A continuation of last year’s trend could see general increases at levels similar to 2023, while a calmer year would likely result in more moderate adjustments.
Despite anticipated premium increases, an underwriting loss for the 2025/26 year is expected to continue, compounded by predicted lower investment yields. Clubs are expected to focus on managing market competition and policyholder churn, maintaining a prudent approach while navigating ongoing cost pressures.
Looking ahead to the forthcoming renewal, most Clubs are expected to seek general increases in the region of 5% to 7.5%, reflecting both inflationary trends and the broader challenges facing the sector.
War Risks Insurance
Few areas of the market are as unpredictable as war risks. The security situation in the Middle East, along with the broader geopolitical landscape, will continue to have a significant impact on the maritime industry. Ongoing instability in the Red Sea, the Black Sea, and other conflict zones continues to influence premiums and underwriting appetite. Each new geopolitical flashpoint has the potential to drive sudden and significant adjustments in pricing.
Recent Houthi statements suggest a temporary pause in attacks against non-Israeli vessels, contingent upon Israel’s adherence to the Gaza ceasefire. However, Israeli-flagged or affiliated ships remain designated targets, keeping risk levels elevated. During a previous pause in hostilities, Red Sea transits briefly recovered to around 350 per week, yet insurance premiums remain 20–30% above pre-2023 levels, reflecting the market’s continued caution and the enduring uncertainty in the region.
Shipowners who can demonstrate robust risk management — from citadel arrangements to armed guards and private security protocols — will continue to benefit from more favourable terms. Nevertheless, volatility in this class is unlikely to subside in the near future.
Environmental Challenges and EUAs
The transition to greener shipping continues to present both opportunities and challenges for shipowners. Compliance with EU Emissions Trading System (EU ETS) allowances is increasingly shaping operational and financial decisions, as vessel operators must account for carbon costs alongside traditional risk and insurance considerations. Rising EUA prices and evolving regulatory requirements place additional pressure on margins, particularly for older vessels with higher fuel consumption. Investment in cleaner technologies, energy efficiency measures, and alternative fuels is becoming essential not only for regulatory compliance but also to maintain competitiveness in a market that increasingly values sustainability.
Trade Tensions and Protectionism
Global trade is also facing new challenges from rising protectionism. Recent tariffs imposed by the USA and China on vessels calling their ports are adding complexity to shipping operations and increasing costs for operators. These measures not only affect freight economics but also influence insurance considerations, as higher operational costs and potential delays may impact claims frequency and risk exposure. Shipowners must navigate this evolving landscape carefully, balancing commercial strategy with compliance and risk management.
How Searock Can Help
At Searock, we understand that shipowners need more than insurance products — they need guidance through shifting markets. Our team works closely with clients to interpret these changes and build bespoke solutions that protect both assets and balance sheets.
We pride ourselves on being true partners, helping our clients worldwide navigate complex risks and develop robust risk management frameworks.
Whether it’s securing competitive H&M terms, ensuring comprehensive P&I cover, or structuring flexible war risks protection, we draw on deep market insight and long-standing relationships across London and international insurers to deliver coverage that is practical, cost-effective, and resilient.
Because in a market that never stands still, understanding the why behind every change is just as important as the coverage itself.
