Maritime Insurers to Keep Facilitating Free Trade as Trump's Tariffs Loom
The International Union of Marine Insurance (IUMI) has restated their intention to facilitate free maritime trade, as the protectionist measures were not in the interests of the marine insurance community.
In an interconnected global economy, protectionism in the form of trade tariffs was said to run counter to IUMI’s values of securing free trade and maintaining and growing the global economy, the organization said at an executive meeting held earlier in February.
Tension and conflict continue to impact free trade in the Black, Red, and Baltic areas. In the Black Sea, the situation has not changed significantly since the Russia/Ukraine war outbreak, and marine insurers have been able to provide coverage for vessel operators and cargo interests without interruption, IUMI noted.
Safe navigation remains a challenge, although the passage of international vessels has not been severely disrupted. Prices of Ukrainian exports have risen, however, with no clear signal that the threat will reduce anytime soon, IUMI said.
According to IUMI, the improved stability in the Red Sea region is predicted to herald a return of shipping to that area, but these supply chains are likely to remain fragile for some time. The Houthis were at war long before the current escalation, so underwriters can’t be sure how the situation will unfold. However, insurance coverage remains available to vessel operators who use that waterway.
IUMI also reiterated its support for freedom of navigation in the Baltic Sea, where recent cable breaks caused by prolonged anchor dragging are causing some tension. Although there is no adequate legislation to deal with this issue, IUMI supports all moves to secure subsea infrastructure and ensure free passage.
“More trade equates to more vessels and cargoes to insure. Protectionist measures tend to restrict trade, impact exposures, and insured values for marine underwriters. They will exert stress on supply chains, pressure specific trade routes, and add to accumulations on vessels or ports.
"This all adds to the overall risk profile. As an international association, we are concerned that the escalation of trade wars generally is an ineffective solution to what is often a deep-rooted problem," said Lars Lange, IUMI's Secretary General.
IUMI’s executive also discussed the growing impact of technology on its sector and recognized its significance in assessing and quantifying risk, improving loss prevention and safeguarding life and property, and streamlining claims handling. Underwriters are already embracing this change, and IUMI’s Data & Digitalisation Forum is monitoring progress and informing the market.