Liga Asuransi – By 2025, the global shipping industry faces unprecedented challenges. Rising geopolitical tensions, protectionist trade policies, and threats to key shipping lanes have created significant uncertainty in international supply chains. According to a UNCTAD report, approximately 18% of global maritime trade is affected by high tariffs, a sharp increase from just 4% at the start of the year..
One direct impact of these tensions is increased risk to ships and their cargo. For example, in the Strait of Hormuz—a vital oil transportation route—marine hull insurance premiums have increased by more than 60% due to the escalating conflict between Iran and Israel. Financial Times. This increase in premiums reflects the increasing uncertainty and potential losses faced by shipping companies.
Furthermore, climate change is also having a significant impact on the shipping industry. The increasing frequency of storms and high waves threatens the safety of ships and cargo. Shipping companies are now faced with the challenge of adapting their operations to increasingly extreme weather conditions.
In facing these challenges, marine hull insurance is crucial. This insurance policy not only protects vessels from physical damage but also provides protection against risks arising from geopolitical tensions and climate change. With the increasing complexity and uncertainty in the shipping industry, having comprehensive insurance coverage is a strategic step that shipping companies cannot afford to ignore.
This article will further discuss the importance of marine hull insurance in the context of the challenges facing the global shipping industry in 2025.
1. Rising Geopolitical Tensions
The global shipping industry never operates in a vacuum. In addition to economic and climate factors,geopolitical tensions are one of the main causes of risk to ships and cargo on international trade routes. The year 2025 marks an escalation of tensions in several strategic regions, which has a direct impact on the security of key shipping lanes.a.
a. Conflict in the Red Sea and Strait of Hormuz
The Strait of Hormuz is a vital waterway connecting the Middle East to global markets. Approximately 20% of the world’s oil supply passes through the strait, so any tensions directly impact global trade. Recently, tensions have escalated due to geopolitical disputes between Iran and several Gulf states, as well as tanker attacks in the region.
- Impact on ships: Routes have to be diverted, operational costs increase, and the risk of accidents increases.
- Impact on insurance premiums: Marine hull premiums for this route have risen significantly, with some reporting increases of over 60% in the first quarter of 2025 (FT, 2025).
Besides the Strait of Hormuz, the Red Sea has also become a hotspot. Armed group activity and piracy in the waters near Bab el-Mandeb have increased, forcing global shipping companies to assess additional risks and adjust their insurance policies.
b. Asia-Pacific Tensions
In the Asia-Pacific region, territorial disputes in the South China Sea have added to the risks of trade routes. Routes previously considered safe are now prone to incidents, including intensive military surveillance, navigational disruptions, and the potential for small-scale conflict.
- Commercial ships have to take longer routes to avoid conflict areas, increasing shipping times and fuel consumption.
- Technical risks, such as engine failure due to longer journeys and exposure to extreme weather, also increase.
c. Impact on Major Trade Routes
Geopolitical tensions have caused significant changes in global trade routes. Routes from Asia to Europe, America, and the Middle East are becoming more complex, resulting in:
- Increased risk of accidents and cargo damage, especially when the ship is passing through unfamiliar waters.
- Increase in operating costs, because ships have to take longer routes or speed up their journey to avoid vulnerable zones.
- Higher need for insurance protection, as risk exposure increases.
d. Implications for Marine Hull Insurance
Geopolitical tensions make marine hull insurance not just a choice, but a strategic necessity:
- Protection against physical damage to ships due to geopolitical incidents.
- Protection against loss or damage to cargo affected by external risks.
- Supporting shipping companies’ financial planning amidst global uncertainty.
With increasing risks in strategic waterways, shipping companies with comprehensive marine hull policies will be better prepared to face emergencies, safeguard their reputations, and ensure operational continuity and profitability.
2. Protectionist Trade Policies
a. Increase in Global Import Tariffs
In 2025, protectionist trade policies increasingly dominated the global economic landscape. One significant step was the increase in import tariffs by the United States, reaching its highest level since 1933, at 19.5%. This move has the potential to disrupt the flow of goods and increase international logistics costs. Major trading partners, such as China, the European Union, Canada, and Mexico, responded by imposing retaliatory tariffs, further complicating the global trade situation.
b. Impact on Supply Chains and Shipping Routes
Rising tariffs and other protectionist policies have caused significant disruptions in global supply chains. Shipping companies have been forced to adjust their routes to avoid areas with high tariffs or trade restrictions. This has led to longer and more complex shipping routes, increasing travel times and fuel consumption. Furthermore, uncertainty in trade policies has caused fluctuations in the supply and demand of goods, directly impacting shipping volumes and frequency.
c. Implications for the Marine Hull Insurance Industry
Changes in trade patterns and shipping routes have a direct impact on the marine hull insurance industry. Increased risks resulting from ships traveling longer and more complex routes increase the potential for damage and accidents. Furthermore, fluctuations in the value of traded goods due to tariffs can affect insurance coverage and premiums. Therefore, insurance companies need to adjust their risk assessments and premium pricing to reflect these dynamic market conditions.
3. Threats to Maritime Infrastructure
The global shipping industry not only faces risks on the high seas, but also in maritime infrastructure which is the backbone of international trade. Ports, docks, canals, and loading and unloading facilities are critical points vulnerable to disruption, whether caused by natural disasters or human-caused events.
a. Attacks on Ships and Maritime Facilities
In recent years, incidents of ship hijacking and attacks on port facilities have increased, particularly in the Red Sea, Gulf of Guinea, and Strait of Malacca. For example, in 2024, more than 150 piracy incidents were recorded in West African waters, causing shipping delays and significant financial losses for ship operators (IMB Piracy Report 2024).
Furthermore, the risk of cyberattacks is also increasing. Modern port infrastructure, which relies on sophisticated IT systems for loading and unloading, can become the target of cyberattacks, resulting in operational disruptions and equipment damage. This emphasizes the need for marine hull insurance that covers protection against damage to the ship by third parties or external interference.
b. Damage to Port Infrastructure
Natural disasters such as tropical storms, high waves, and earthquakes also pose significant risks to port infrastructure. In 2023, an earthquake in Turkey caused damage to docks and anchored vessels, triggering significant claims from shipping operators. Port damage not only delayed loading and unloading but also increased the risk of damage to vessels waiting in surrounding waters.
c. Impact on Marine Hull Insurance
Threats to maritime infrastructure require shipping companies to consider more complex risks. Marine hull policies now cover:
- Physical damage to the shipdue to collision or accident at the port.
- Losses due to delay caused by infrastructure disruption.
- Third party liability, including damage to docks or facilities belonging to other parties.
d. Mitigation Strategy
To address this threat, shipping companies are advised to:
- Choose alternative shipping routes when passing through vulnerable areas.
- Use ship and port monitoring technology to detect risks early.
- Compile integrated insurance policy which covers land and sea risks, including infrastructure damage and third party disruption.
By understanding and anticipating threats to maritime infrastructure, companies can ensure operational continuity, reduce financial risk, and maximize the effectiveness of marine hull insurance protection.
4. Climate Change and Extreme Weather
The global shipping industry is now facing increasingly complex challenges due to climate change Extreme weather phenomena, including tropical storms, high waves, and unpredictable sea conditions, are becoming more frequent and directly impacting the safety of ships, cargo, and shipping operations.
a. Increased Frequency of Storms and High Waves
Data fromWorld Meteorological Organization (WMO) 2025Data shows that the number of tropical storms in the Atlantic and Pacific Oceans increased by 15% compared to the previous decade. Meanwhile, high waves in the Strait of Malacca and the South China Sea caused damage to ships and docking facilities. A recent example was the high wave incident in the Pacific Ocean in July 2025, which resulted in damage to several cargo ships’ hulls and navigational equipment.
This situation increases the physical and financial risks for shipping companies. Delivery delays, ship repair costs, and cargo damage are all real consequences; marine hull insurance which includes extreme weather risks is crucial to protect assets and maintain operational continuity.
b. Impact on Operational and Logistics Plans
Extreme weather also affects ship operational plans:
- The shipping route must be adjusted to avoid storm-prone areas.
- Departure and loading and unloading schedules are disrupted, thereby increasing the risk of delays and additional costs.
- Load management becomes more complex, especially for weather-sensitive commodities.
c. Additional Risks Due to Climate Change
Apart from storms and high waves, climate change also has an impact on ice conditions in the ArcticThe northern shipping lanes are now more accessible, but they present new risks such as rapidly advancing glaciers and extreme temperatures that can damage ship engines. Meanwhile, in tropical regions, changing rainfall patterns are increasing the risk of flooding in ports and disrupting onshore infrastructure connected to maritime supply chains.
d. The Role of Marine Hull Insurance in Risk Mitigation
With the increasing frequency of extreme weather events, marine hull insurance policies no longer only cover vessels against common accidents. Modern policies now include:
- Damage from storms, high waves, and hurricanes
- Damage to navigation equipment and engines due to extreme conditions
- Operational disruptions and delivery delaysweather-related
e. Shipping Company Strategy
Shipping companies are advised to:
- Conduct periodic risk assessments to the shipping routes used.
- Adopting advanced weather monitoring technology and navigation systems to reduce risk.
- Adjusting insurance policies to cover new risks arising from climate change.
With these measures, companies can maintain the safety of their vessels and cargo, while ensuring operational continuity despite increasingly extreme sea conditions.
5. The Role of Insurance Brokers in the Marine Hull Industry
The global shipping industry faces increasingly complex risks in 2025, ranging from geopolitical tensions, protectionist policies, maritime infrastructure disruptions, to climate change and extreme weather. Amidst these conditions,insurance brokerThey play a crucial role as a liaison between shipping companies and insurance providers. They not only sell policies but also help companies understand risks, tailor coverage, and optimize coverage.
a. Risk Analysis and Strategic Consulting
Professional insurance brokers do comprehensive risk analysis regarding shipping routes, vessel types, cargo types, and company operational profiles. With this understanding, brokers can:
- Give the most suitable marine hull policy recommendations, including coverage for physical damage to the vessel, damage to cargo, operational disruption, and third party risks.
- Provide risk scenario simulation, for example the impact of tropical storms in the Pacific or geopolitical conflicts in the Strait of Hormuz, so that companies are ready to face potential financial loss.
b. Policy Adjustment and Premium Optimization
Insurance brokers help shipping companies to tailor policies to suit their needs.insurance value according to actual risk exposure. This is important because:
- Over-coverage can increase premiums without adding significant value.
- Under-coverage risks leaving the company bearing the losses alone when an incident occurs.
Through their membership, brokers can optimize premiums so that the company obtains maximum protection at efficient costs.
c. Negotiation with Insurance Company
One of the added values of the broker is the ability to negotiate policy terms with insurance companies. For example:
- Ensuring coverage for high-risk routes, such as the Red Sea, Strait of Malacca, or South China Sea.
- Include additional protection clauses, for example for cyber risks or damage due to natural disasters.
- Get premium discounts or integrated policy packages that are more profitable than direct applications.
d. Ongoing Claims Support and Risk Management
Brokers don’t just stop once the police are published. They also:
- Help fast and efficient claims process, minimizing operational disruption.
- Give periodic risk audits, so that companies can adjust policies if there are changes in routes, loads, or geopolitical conditions.
- Becoming a strategic consultant in internal risk management development/shipping company
Conclusion and Recommendations
The global shipping industry in 2025 faces increasingly complex risks, ranging from geopolitical tensions, protectionist policies, threats to maritime infrastructure, to climate change and extreme weather. All of these factors increase the potential for physical and financial losses to ships and cargo. Under these conditions,marine hull insurance becomes a strategic priority that cannot be ignored.
Shipping companies are advised to ensure that the policy is comprehensive, covering damage to the vessel, cargo, operational disruption, as well as third-party risks and natural disasters. Regular risk audits and policy adjustments are essential, particularly when shipping routes or geopolitical conditions change.
A professional insurance broker plays a key role in helping companies understand risks, customize policies, optimize premiums, and support the claims process to keep operations running smoothly.
L&G Insurance Brokersis ready to assist with comprehensive and flexible marine hull insurance solutions. With our support, shipping companies can protect assets, maintain operational continuity, and face global uncertainty with greater confidence.Consult your insurance needs now and ensure your ship and cargo investment is optimally protected.
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