Weak financial position of shipping companies may slowdown growth in the marine-hull segment of the insurance industry, reports indicate.
Marine-hull insurance is purchased by port authorities, shipowners, shipbuilders, oil- and energy-sector companies, bankers and financiers of ships or vessels who have insurable interest.
Industry players opine that this segment is large and has huge risks associated with it. This field has not been profitable, and, hence, insurers are going slow, some industry sources said.
During Apr-Dec 2012, general insurers underwrote a gross premium of Rs 832.85 crore in the marine-hull segment, data from the Insurance Regulatory and Development Authority (IRDA) shows.
While public general insurers contributed Rs 80.07 crore, private general insurers contributed Rs 752.78 crore. The marine-hull segment was brought out of the tariff regime in 2003-04. However, instead of seeing a hike in premiums, companies saw a drop. This, according to insurers, was due to the bad performance of marine hull as a part of the economy.
Marine hull insurance covers any loss or damage to ships, tankers, bulk carriers, smaller vessels, fishing boats and sailing vessels.