The sector’s underwriting performance was the main item on the agenda for the opening morning of the International Union of Marine Insurance (IUMI) annual conference with the market warning that the there was little good news on the horizon in the short to medium term.

Facts and Figures Committee chairman Cedric Carpenter said the global marine insurance premium for 2009 stood at $22.9 billion which was a 2% fall on 2008. Cargo premiums fell by 7.7% at a time when the market had to increase its predicted loss reserves for the 2007 and 2008 underwriting year by 7%.

While the hull insurance market saw premiums rise it was off the back of the arrival of new tonnage into the market and Charpentier warned that in the next three years the delivery of new tonnage equivalent to 40% of the current world fleet was set to occur.

“This will drive overcapacity in the market and it will impact the freight rates,” he said. “It will cast a cloud over the shipping market for the next four years at least and given the fragile nature of the global economy and the lack of certainty that the positive economic indicators we have seen this year will continue it has to be a concern.”

The hull insurance market is set to report an underwriting loss for the fourteenth consecutive year. Fact & Figures Committee member Astrid Selman said: “It has been fourteen years straight with technical losses in the hull classes so I suppose you could say the market was stable!”

However of real concern was the cargo market which is set to deliver a loss for 2009 the first time the sector has been in the red since 2000.

“We had said we were concerned about the way I which we could slip into the murky waters of unprofitability for some years and now it has happened said IUMI Cargo Committee Chairman Mike Davies.

The sector has seen an influx of new capacity over the past 12 months and a hike in the level of claims.

“It is a real concern that we have seen the predicted claims costs for 2007 and 2008 increase by 7% in the space of a year,” he added.

On the new capacity Davies said: “We all think individually we are better then the rest and that with our risk management systems we can return an underwriting profit.”