Globalisation slowdown heralds ‘brave new world’ for marine insurers, warns IUMI President

Geopolitical conflicts and shifting trade patterns are redefining risks and opportunities for the marine insurance sector.

Opening this week’s International Union of Marine Insurance (IUMI) conference in Singapore, IUMI President Frédéric Denèfle warned that marine insurers are facing significant change as the world approaches the end of an era of seamless globalisation.

Denèfle reflected on the deepening shifts in global trade — a theme he has raised in previous IUMI conferences but says has now reached a critical turning point:

“The end of globalisation is fast approaching,” he said. “We’ve already witnessed a slowdown in recent years, but post-COVID the trend has accelerated. While some uncertainty over US tariffs has eased, escalating trade tensions and regional conflicts are reshaping the foundations of international commerce. Conflicts in Ukraine/Russia, and the Red Sea are a stark reminder that hard national interests are taking precedence over international cooperation and peaceful economic growth.”

In his conference workshop, ‘Re-Globalisation – Geopolitics and Trade’, Denèfle explained that the changing environment does not signal the end of international trade, but rather a mutation into a new era — one that marine insurers must understand.

“Traditional shipping and logistics practices are being disrupted,” he said. “The global trade environment is no longer moving toward seamless integration. Instead, fragmentation is taking hold, creating new challenges and new opportunities for risk assessment, underwriting and innovation.”

According to Denèfle, this change was already making itself known in a number of ways including:  

-        Vessels avoiding high-risk regions and using longer, costlier routes.

-        A possible resurgence of inland transport and nearshoring.

-        Rising goods prices and subsequent effects on inflation.

-        Reorganisation of cross-border supply chains, requiring investment in new shore-side infrastructure.

-        Increased reliance on artificial intelligence, alternative trade corridors and emerging markets.
 

These dynamics, he suggested, could give rise to a new type of shipping industry — one that is more adaptive, technology-driven and strategically diversified.

Despite these potential shifts, Denèfle struck an optimistic tone, emphasising the marine insurance sector’s robustness and enduring relevance:

“The marine insurance markets remain stable,” he said. “Financial ratings are strong, and trust in insurers remains high. Of course, a sharp downturn in international trade could affect global premium volumes, meaning we would need to revisit business plans and underwriting policies. But for now, our sector is demonstrating remarkable resilience.”

“Marine insurers have always adapted to change — and this period will be no different. What we are facing is not the end of global trade but the beginning of a new era. To succeed, we must understand these shifts fully, embrace innovation and continue building trust and resilience into everything we do.”