Cargo Insurance Market Research Report 2024

Cargo Insurance Market Synopsis

Cargo Insurance Market Size Was Valued at USD 55.79 Billion in 2023 and is Projected to Reach USD 74.73 Billion by 2032, Growing at a CAGR of 3.3% From 2024-2032.

Cargo insurance is a type of insurance policy that provides coverage for loss or damage to goods while they are being transported from one location to another.

• Cargo insurance is a crucial financial safeguard for businesses and individuals participating in the movement of goods via sea, air, road, and rail. It offers protection in global trade by covering losses that may not be included in standard carrier liability when goods travel through various jurisdictions and face different risks.
• Cargo Insurance is very useful in Risk Management and assists businesses in reducing the financial risks related to the loss or damage of goods while in transit. This consists of safeguarding from unpredictable events such as natural disasters, accidents, theft, and pilferage. Insurance for all methods of transportation, including sea, air, road, and rail, offers specific coverage to protect against losses during shipping.
• Cargo Insurance provides Tailored protection based on the type of products and particular risks, cargo insurance plans can be modified to cover specialized goods or special situations, like perishable items, valuable goods, or products sent to politically unstable areas.
• The assurance that the shipment's monetary worth is secure enables companies to concentrate on their activities without the ongoing concern of potential damages. In certain situations, cargo insurance may be necessary as per the contract between the sender and the recipient or as required by financial institutions funding the shipment.
• cargo insurance provides coverage for the owner's portion of the loss or salvage expenses in the event of a marine accident involving the intentional sacrifice of goods to protect the ship (general average). Insurance coverage for cargo losses, businesses can ensure their operational continuity, as insurance payouts can assist in funding the replacement of goods.

Top Key Active Players Involver Are:

“Allianz (Germany), American International Group (AIG) (United States), AXA (France), Chubb (United States), Zurich Insurance Group (Switzerland), Tokio Marine Holdings (Japan), Liberty Mutual Insurance (United States), CNA Insurance (United States), Mitsui Sumitomo Insurance (Japan), The Travelers Companies (United States), Berkshire Hathaway Specialty Insurance (United States), Sompo International (Japan), Marsh & McLennan (United States), QBE Insurance Group (Australia), RSA Insurance Group (United Kingdom), Aviva (United Kingdom), Generali Group (Italy), Munich Re (Germany), Lloyd's of London (United Kingdom), Mapfre (Spain), SCOR SE (France), Allianz Global Corporate & Specialty (Germany), Amlin (United Kingdom), Great American Insurance Group (United States), Hiscox (United Kingdom) and Other Active Players.”

Cargo Insurance Market Trend Analysis

Increase in Global Trade

• The rise in international trade is a major factor driving the expansion of the cargo insurance industry, supporting a wide range of economic activities worldwide. As countries and companies increase their involvement in international trade, the amount and worth of products being moved through oceans, air, and ground rise considerably.
• Cargo insurance in this situation acts as a protection, reducing the financial risks connected with these vulnerabilities. It provides a safeguard for shippers, freight forwarders, and receivers from unexpected circumstances that may result in cargo being damaged, lost, or stolen while in transit.
• The expansion of global trade, supply chains become more complicated, requiring specialized insurance products to meet the unique requirements of different types of cargo, ranging from perishable goods to valuable technology.
• The increase in global trade raises the need for better and more dependable insurance options, promoting creativity within the insurance industry. Insurance companies adjust by creating innovative ways to evaluate risk, utilizing advanced technologies such as big data, artificial intelligence, and the Internet of Things (IoT) to improve their ability to forecast and handle risks, ultimately increasing the appeal of cargo insurance plans.
• The interdependence of worldwide markets heightens the chain reaction of disturbances, turning cargo insurance into a crucial requirement for companies to maintain their activities and guarantee the ongoing flow of global trade. Hence, in this way Increase in Global Trade acts as a driver in the Cargo Insurance Market.

Increase in Customized and Niche Insurance

• Customized insurance plans are designed to address the specific risks faced by specialized cargo, like valuable items, perishable goods, or shipments passing through dangerous areas. Standard policies may not sufficiently cover certain risks like temperature changes, theft, or piracy, whereas these policies frequently include such coverage. By providing customized protection, insurance companies can enhance client trust and loyalty by safeguarding against specific risks.
• Niche insurance caters to the insurance requirements of new industries or special situations, like the expanding e-commerce logistics field that faces risks in last-mile delivery, returns management, and cyber threats. Technology integration, like IoT devices for monitoring and data analytics for risk profiling, enables more accurate insurance coverage, rendering products more suitable and adaptable to market demands.
• Emphasizing niche insurance also creates opportunities for insurance companies to generate additional income, as it allows them to cater to market sectors that were previously neglected because of a shortage of specialized offerings. This not only increases market reach but also encourages creativity, expanding the scope of insurance coverage to include environmental risks and supply chain interruptions.
• The move towards tailored and specialized insurance presents a chance for the cargo insurance industry to grow dynamically, improving its ability to adapt and respond to the constantly changing global trade environment. Hence, in this way Increase in Customized and Niche Insurance acts as an opportunity in the Cargo Insurance Market.

Cargo Insurance Market Segment Analysis:

Cargo Insurance Market Segmented based on Insurance Type, Distribution Channel, Type, and End-User.

By Insurance Type, Marine Cargo Insurance Segment Is Expected to Dominate the Market During the Forecast Period

• The world economy is highly dependent on maritime trade, a significant amount of goods is being transported internationally. Marine cargo insurance is essential for exporters, importers, and shipping companies as it offers protection against various risks like loss or damage during transport, bad weather, piracy, and accidents.
• The marine cargo insurance sector provides a diverse selection of policies designed for different types of cargo and shipping requirements. This adaptability enables thorough protection that considers the specific risks connected to various goods, thereby appealing to a wide range of customers.
• The increasing complexity of supply chains results in a higher likelihood of loss or damage due to the multiple jurisdictions goods pass through. Marine cargo insurance protects from these complications, allowing companies to effectively control their risks.
• Global economic growth and the growth of international trade agreements increase the transportation of cargo, which in turn increases the need for marine cargo insurance. Political instabilities like trade disputes or local crises can increase the perceived importance of insurance.
• Increased awareness of the potential financial consequences of not having insurance has resulted in more businesses looking to obtain insurance coverage. Marine cargo insurance is an excellent option for reducing risks in the unpredictable of international shipping due to its extensive coverage. By Insurance Type, Marine Cargo Insurance Segment Is Expected to Dominate the Cargo Insurance Market.

Source: International Union of Marine Insurance

• The Above picture Depicts the Marine Insurance by line of Business of 2023 given by the IUMI Where the Transport/Cargo sector has the highest insurance of 56%, followed by Global Hull at 24%, Offshore/Energy at 12%, and Marine Liability at 8%

By End-User, Cargo Owners Segment Held the Largest Share In 2023

• The dominance of cargo owners in the marine cargo insurance industry showcases the core principles of risk management in global commerce. Cargo owners, such as manufacturers, wholesalers, retailers, and individuals engaged in international trade, are aware of the risks associated with their products, whether they are valuable goods or perishable items.
• The Cargo Shipping products travel across oceans, encountering dangers like theft, rough weather damage, collisions, or piracy. The monetary impacts of these situations can be devastating, making having insurance a wise choice for businesses.
• The insurance gives a sense of security and reliability to the supply chain. Cargo owners can better plan and reduce risks by ensuring their investments are safeguarded against various potential threats. It's a method of transferring risk that allows them to confidently engage in business, being aware that they can recover from unforeseen losses.
• Legal and contractual responsibilities in global commerce also have a substantial impact. A lot of shipping agreements typically need full insurance coverage, with cargo owners either obtaining coverage themselves or making sure the carrier has enough insurance. This regulatory landscape highlights the significance of the cargo owners’ sector within the insurance industry.
• The growing recognition of the advantages of insurance, along with the rising intricacy and global reach of supply chains, motivates cargo owners to look for customized insurance options that meet their particular requirements. Hence in this way, by end-user, the Cargo Owners Segment Held the Largest in the Cargo Insurance Market.

Cargo Insurance Market Regional Insights:

Asia Pacific is Expected to Dominate the Market Over the Forecast Period

• The Asia Pacific in the marine insurance market is due to a combination of strategic economic factors and the quick growth of the maritime industry. This area, with its many growing and upcoming economies, has emerged as a major player in global trade, production, and transport.
• The economic expansion in the region, particularly in nations such as China, Japan, and South Korea, drives an increase in global trade. These countries, recognized for their economies driven by exports, heavily depend on marine transportation to transport goods. This dependency leads to a higher need for marine insurance to protect valuable shipments, ships, and risks linked to the maritime sector.
• The world's busiest ports, like Shanghai, Singapore, and Hong Kong, are located in the Asia Pacific region and serve as important hubs for global trade. As maritime activities grow, the likelihood of accidents and losses also increases, requiring strong insurance protection. These ports play a crucial role in enabling the trade of goods between Asia and other countries, underscoring the importance of marine insurance in the transportation process.
• The expansion of the middle class in the Asia Pacific area and the rise in their available income are leading to a boost in recreational options, such as cruise tourism, thereby increasing the need for specific marine insurance products.
• The area's continuous investments in infrastructure, such as enlarging ports and establishing coastal economic zones, solidify its place in the market. These investments improve the maritime capacities of the area, leading to increased shipping operations and consequently, a greater demand for extensive insurance protection. Hence, in this way, Asia Pacific is Expected to Dominate the Cargo Insurance Market.

Cargo Insurance Market Active Players

• Allianz (Germany)
• American International Group (AIG) (United States)
• AXA (France)
• Chubb (United States)
• Zurich Insurance Group (Switzerland)
• Tokio Marine Holdings (Japan)
• Liberty Mutual Insurance (United States)
• CNA Insurance (United States)
• Mitsui Sumitomo Insurance (Japan)
• The Travelers Companies (United States)
• Berkshire Hathaway Specialty Insurance (United States)
• Sompo International (Japan)
• Marsh & Mclennan (United States)
• QBE Insurance Group (Australia)
• RSA Insurance Group (United Kingdom)
• Aviva (United Kingdom)
• Generali Group (Italy)
• Munich Re (Germany)
• Lloyds Of London (United Kingdom)
• Mapfre (Spain)
• Scor Se (France)
• Allianz Global Corporate & Specialty (Germany)
• Amlin (United Kingdom)
• Great American Insurance Group (United States)
• Hiscox (United Kingdom) and Other Active Players

Key Industry Developments in the Cargo Insurance Market:

• In February 2024, Insurtech MGA Load sure announced the launch of Columbia- Motor Truck Cargo and Logistics Services Insurance, a data-powered insurance product, purpose-built for the logistics community. That will provide market-leading coverage, protecting motor carriers, freight brokers, and freight forwarders against damage to cargo. Supplemental coverages in addition to the main insurance agreement include business personal property, contingent coverage, contractual penalties, debris removal, extra expense, freight charges, and shipping containers.
• In January 2024, RSA Insurance’s UK Specialty Lines business and Brit Ltd (“Brit”) announced the launch of a new market-leading Project Cargo consortium - ‘BUILD’. The consortium, one of the largest in the cargo market globally, is now open to business and offers a guaranteed capacity of up to USD 285 million for Project Cargo risks worldwide. Project Cargo insurance is cover and protection for equipment that could be lost or damaged in transit. The consortium will provide comprehensive global Project Cargo coverage, including Delay in Start-up and Advanced. Loss of Profits, and act mainly as a lead, or follow capacity where applicable