The maritime industry is facing a number of dynamic challenges. The need to transition to a low-carbon economy, the impact of geopolitical shifts on supply chains and shipping routes, and advances in technology, among other things mean that tomorrow’s workforce will need new skillsets.
To help shipowners navigate the changes, we are continually enhancing our own knowledge, expertise and data to ensure that they can meet the future demands of a changing labour force and risk environment.
The route to reduced emissions
The marine industry has, like many other sectors, set ambitious greenhouse-gas-emission reduction targets. At the most recent International Maritime Organization (IMO) meeting in April, an agreement was reached that made shipping the first industry in the world subject to internationally mandated emissions reduction targets.
From 2028, the IMO requires ships to begin to use alternative fuels, and its Global Fuel Standard will require ships to reduce their annual GHG fuel intensity. This means they will need to restrict how much is emitted for each unit used on a so-called well-to-wake basis – all the way along the chain. Those ships that emit above the thresholds set will need to acquire remedial units to redress the balance.
As part of their efforts to meet these goals, shipowners around the world are exploring new technology and fuel types, from hydrogen to nuclear. This brings with it evolving risks and opportunities that require continually updated knowledge and expertise. And the mariners of tomorrow will need to understand how to work alongside new fuel sources on new designs of vessels and new technology.
Several recent developments have prompted many companies to rethink trading routes, update supply-chain strategies and consider onshoring or nearshoring.
Geopolitical changes
By its nature, the international maritime industry is subject to challenges caused by geopolitical shifts. And several recent developments have prompted many companies to rethink trading routes, update supply-chain strategies and consider onshoring or nearshoring.
Since late 2023, attacks by Houthi rebels on vessels in the Red Sea, one of the world’s busiest shipping corridors, have meant that many international shipping firms needed to continually reassess risks in this area. Many opted to alter their routes. Charting new courses through the Cape of Good Hope, for example, added significant time and costs to a voyage but also require different navigational and crew skills too.
The Panama Canal, another of the busiest shipping lanes in the world, is also a hotspot for geopolitical tension. And with disputes over control of the canal and the charges levied for using it rising up the agenda once more, shipping companies are again being forced to consider route diversification.
The recent tariffs enacted by the United States are prompting many companies to rethink their global supply-chain strategies. Political tensions between China and the United States, in particular, are likely to have far-reaching consequences for supply-chain disruption.
Not only do these pressures require clients to ensure they are agile and able to adapt quickly, they add to an already volatile risk picture. The industry’s workforce will need training and development to meet these new challenges and there must also be an emphasis on open and effective communication between all stakeholders – including insurer partners.
Tech progress, demographic challenges
Advancements in technology are having a profound effect on managing risks in the maritime sector. Evolutions like the use of sensors in cargo can give better visibility of the conditions in which goods are being transported, for example, giving risk engineers real-time data to help clients with risk prevention.
The use of artificial intelligence (AI) to manage inventories means that less stock needs to be held in storage at any one time, improving efficiency and reducing the risks associated with goods being kept in warehouses or at docks.
This increased use of technology means that the job of a mariner is evolving from one that was predominantly physical into one that requires different skills.
Against this backdrop, however, the industry is facing challenges in attracting talent. The increased length of some voyages, caused by the need to reroute to avoid political hotspots, has made a life at sea less appealing for some. And a declining birthrate, coupled with migration prompted by a changing climate and political and social unrest in some parts of the world are also likely to pose difficulties in recruitment.
The role of the global underwriter
The marine industry is at an inflection point with our clients reassessing how and where they operate to meet the numerous and often interconnected risk challenges they face. It is in everyone’s interest to ensure that the marine industry remains sustainable for the future.
We recognise that we need to use our global expertise and insight – and apply our in-depth knowledge of the risks and opportunities posed by the energy transition, tech evolution and other areas – to help our clients ready themselves for the future.
Our ability to analyse loss trend data and give insights to risk managers to help them adapt to potential challenges, for example, will be vital in assisting clients in readying themselves for the changes to come.
This applies all the way along the risk journey, from ensuring that our colleagues have the technical understanding and relevant data, to examining supply-chain strategies, to designing solutions like our excess emissions product to assisting with risk prevention, mitigation and transfer.
