Marine insurance underwriters are headed for a record year of losses and a bleak future even though piracy has dropped off the list of major concerns for the industry.
Storms brew for marine insurers
Overall confidence levels in the shipping industry fell in the three months that ended last month to their lowest level since the survey was launched in May 2008, according to the latest Shipping Confidence Survey from the international accountant and shipping adviser Moore Stephens.
The fall comes after three successive quarters of improved confidence. Chief among the concerns raised by respondents was the glut of new ships coming on to the market and continuing uncertainty about the global economy.
Last month, the average confidence level expressed by respondents in the markets in which they operate was 5.3 on a scale of 1 (low) to 10 (high), compared with 5.7 recorded in the previous survey in May, and identical to the figure posted in August last year. The survey was launched in May 2008 with a confidence rating of 6.8.
Charterers were the only category of respondent to report an increase in confidence over the three-month period at 5.7 compared with 5.0 in May.
Owners' confidence was down from 5.6 to 5.1, the lowest rating for this category of respondent since the survey began. "It is astonishing a whole industry has been misreading the markets, which has led to the prospect of excess building capacity for years and years to come, based on wrong assumptions by analysts," one respondent to the survey said.