AN AGEING fleet profile and more severe losses is contributing to a “soft environment” for the ocean hull market, according to Ilias P. Tsakiris, chair of the International Union of Marine Insurance Ocean Hull Committee.
Speaking at the IUMI annual conference in Singapore, Mr Tsakiris said while the overall premium base continued to rise, the underlying risk environment was intensifying, driven by an ageing fleet, more severe losses, geopolitical shocks and the operational complexity of the energy transition.
The committee reported that in 2024 global hull premium increased by about 3.5%, to USD 9.67bn, with Europe accounting for about 53%, Asia/Pacific 35% and other regions 12%.
The underwriting market remained challenging with increased capacity and, in some cases, a prioritisation of growth over technical discipline.
Loss severity remains above pre-COVID levels, led by machinery failures. Fires and explosions remain “relatively few but costly” and collision/contact/grounding frequencies have edged up.
“Although in headline numbers, losses have not surged, loss ratios remain under pressure because of higher costs, more expensive incidents and an ageing fleet that is harder to repair”, Mr Tsakiris said.
“The average world-fleet age is 22.6 years of age with 35% of ships more than 25 years and 61% more than 15 years.
“Meanwhile, the order book for replacement vessels is a modest 16% of the existing fleet and scrapping sits at multi-year lows.”
In 2024, 52% of all incidents involved greater than 20-year vessels, 41% were older than 25-years.
Older ships are often uneconomical to repair, leading to constructive total losses or even unrepaired damage claims.
Ms Tsakiris said the ageing fleet was “a quiet but powerful driver of claims,” said Tsakiris.
Meanwhile the energy transition is underway, reportedly adding to the industry’s exposure.
In 2025, there have been 763 orders to date, of which 31% are alternative-fuel capable.
It is a similar story with deliveries – 12.8% of ships delivered in 2024 had alternative-fuel capability and for this year it is projected that 15.4% of about 1,400 deliveries will be designed for alternative fuels.
“Novel fuels like methanol, ammonia and hydrogen introduce completely new hazard profiles,” Mr Tsakiris said.
“We will be insuring more complex machinery with less repair history and yet the replacement effect is limited, so the average age of the world fleet will continue to rise even as new ships arrive. The energy transition is not just a green story – it is a risk story.”
Mr Tsakiris said geopolitical shocks such as the Ukraine–Russia war and the Red Sea security picture continued to shape the marine insurance market.
“War premiums are higher but accumulation of risk is harder to control, and the human toll — with detentions, kidnappings, and crew abandonments — continues to rise,” Mr Tsakiris said.