Issues Facing Inland Marine Insurance Brokers in 2023

What will 2023 be like for marine insurance brokers, and how will the insurance landscape affect them? Already buffeted by numerous challenges related to marina insurance and commercial marine programs, brokers may be facing an even rougher year ahead, with a few bright spots on the horizon. 

Rich Soja of Allianz Global Corporate and Specialty (AGCS) shared this prediction. As global product leader of the company’s inland marine department and head of the firm’s North American marine division, Soja can identify emerging trends in the maritime insurance industry. 

Soja expects the maritime insurance sector to undergo lengthy periods of economic uncertainty. But he also anticipates positive developments that could provide some measure of relief to the beleaguered industry. 

Insurance Trends in 2023 for Marine Insurance Brokers to Consider

Some of the few insurance trends in 2023 include inflation, construction expenditure, and reinsurance.

Inflation

The rising cost of materials caused by inflation is worsening an already difficult period for the inland marine insurance trade. The increased costs of paying claims make it more difficult for insurers to get the right price for exposure. Wage inflation also affects claim payments, and significant challenges remain in the global supply chain.

Construction Expenditure

Construction expenditures will likely increase across the board in 2023. The past several months have been a boom period for the construction industry. Likewise, it is partly due to the bipartisan infrastructure law pushed by US President Joe Biden. 

This development was a significant boost for the inland marine insurance industry. And with several upcoming projects funded by the federal government, there may be a diminishing return on the impact of the expected recession. It could help the construction trade weather the tough times ahead.

Reinsurance

Reinsurance is another challenging area. Soja expects many of the reinsurance sector changes will affect inland marine insurers. The upcoming renewal season promises higher treaty prices, reduced capacities, and higher corporate retentions, all of which brokers should prepare themselves for.

Rich Soja said that AGCS and other companies now pay reinsurers more for excess loss protection. It could lead to lower profit margins if the added cost isn’t passed on to the insurance sector. And while there is some increase in insurance rates during this market cycle, it is much less than the figures registered in the past few years. 

Conclusion 

Facing the challenges of 2023 requires insurers to develop long-term relationships with their brokers and increase their market shares over the next several months. It is the strategy that AGCS plans to employ, regardless of the headwinds that Soja anticipates on the horizon.

The AGCS executive remains optimistic about what 2023 has in store for the company and the industry at large. Citing the firm’s focus on taking a “growth view”, Soja shared plans to maintain a balance between internal concerns and customer focus. This dual approach will help ensure the generation of adequate returns for the company’s investors and the continued availability of valued products and services for the market.

About Merrimac Marine Insurance

At Merrimac Marine, we are dedicated to providing insurance for the marine industry to protect your clients’ business and assets. For more information about our products and programs, contact our specialists today at (800) 681-1998.