Full capacity: Marine markets grapple with regional instability

June 21 2025 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.

IAN exclusives. Marsh Japan hired WTW veteran Hirofumi “Luke” Nakamura as a senior vice president, InsuranceAsia News reported exclusively. Tokyo-based Nakamura joined the broker after 13 years at WTW as a general manager. Nakamura joined Marsh along with several other colleagues as the battle for talent in the Japanese broking market heats up. 

In another scoop, we revealed that Zurich has hired Koji Okumura as a senior property underwriter, based in Japan. Okumura previously worked at Munich Re as an underwriter for almost 10 years, travelling between Japan and Hong Kong. 

1.7 renewals. As we look to the July 1 renewals in Australia and New Zealand, the trends established earlier this year are continuing, with risk-adjusted rate reductions sometimes soaring into double digits.  

Renewal negotiations have been “quite orderly”, but nearly all catastrophe programs are witnessing significant reductions, influenced heavily by loss history and risk assessments. 

Despite an abundance of surplus capacity, reinsurers remain steadfast, showing little inclination to lower first loss retention levels, which have stabilised following substantial increases in recent years. 

Soaring rates. The recent Air India crash is poised to send airline hull and liability rates soaring, with potential impacts on product liability rates as well.  

Experts anticipate premiums could rise by 10-15% in the upcoming renewal cycle, accompanied by stricter terms.  

The reassessment of widebody aircraft risks is particularly critical, especially for the Boeing 787-8 Dreamliner, which faced its first fatal hull loss in this tragic incident. 

The estimated total insurance payout is projected to reach a staggering US$475 million, marking it as the costliest aviation-related loss in India over the past decade – three times higher than the total aviation premiums collected in the country in 2023.  

As the insurance landscape evolves, all eyes are on these developments, signalling a turbulent road ahead. 

Marine market on the brink

Last week, the aviation insurance market faced significant upheaval, with losses that foreshadowed inevitable rate hikes and tighter terms.  

But as we dive into this week, the marine insurance sector finds itself in the eye of a brewing storm, exacerbated by escalating tensions in the Middle East. 

The recent collision and subsequent fires aboard two tankers off the coast of the United Arab Emirates have cast a shadow over a market already reeling from two earlier incidents in the Arabian Sea.  

The stakes are high, and the response swift: The Financial Times reported that prices for ships navigating the critical Strait of Hormuz have surged by over 60% since the outbreak of conflict between Israel and Iran. 

The Strait of Hormuz is not just another shipping lane; it is a lifeline, the sole maritime passage from the Persian Gulf to the open seas.  

As Skuld emphasises, this narrow stretch of water is one of the most strategically significant shipping channels in the world.  

With the recent hostilities, the cost of hull and machinery insurance for vessels traversing this strait has jumped from 0.125% to about 0.2% of the ship’s value in the India market, a stark indicator of the increased risks. 

Concerns about safety are palpable, echoing the sentiments of industry experts.  

Marcus Alcock, writing for us this week, warned that Iran’s actions could mark a pivotal moment for the specialty (re)insurance market, reminiscent of the Gulf War’s disruptive legacy from 1990-91.  

That conflict led to severe delays and disruptions in shipping routes, with Lloyd’s estimating the cost to global trade at around GBP475 million – about GBP1 billion today when adjusted for inflation. 

While the broader (re)insurance markets have been inching towards profitability and stability in the past year or so, the turbulence in the marine and aviation sectors signal that testing times lie ahead for specialty insurers.  

The market now faces a reckoning. War, fire, and spiralling risk – this isn’t just turbulence, it’s a storm. And the specialty market is sailing straight into it. 

People moves 

Allianz Trade has elevated Helene Payen to Asia Pacific CFO, effective from July 1, succeeding Benoit Semelin, who will become CFO for northern Europe.  

Specialty (re)insurer Markel International has appointed Muhammad Saber as operations manager for Asia Pacific. Singapore-based Saber joins from Liberty Specialty Markets. 

P&I club Gard has appointed André Kroneberg to lead its Asia business unit within its global strategic restructuring, effective from September 1.  

To catch up on the most important appointments in the region, make sure to check out our weekly people move roundup. 

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