PUBLISHER: Allied Market Research | PRODUCT CODE: 1365673
PUBLISHER: Allied Market Research | PRODUCT CODE: 1365673
According to a new report published by Allied Market Research, titled, "Cargo Insurance Market," The cargo insurance market was valued at $71.4 billion in 2022, and is estimated to reach $106 billion by 2032, growing at a CAGR of 4.1% from 2023 to 2032. Cargo insurance can be purchased for goods during shipment to help mitigate risks associated with shipping processes while also securing shipment of the goods. Cargo insurance protects businesses and carriers from financial losses caused by cargo damage or loss. Transporting goods safely and securely can be challenging, especially if they are fragile. In these situations, cargo insurance is crucial because it protects against financial losses by paying the actual value of the shipment in the unlikely event that it is damaged or lost.
The rising popularity of marine cargo insurance owing to an increase in the volume of international shipments through sea routes is anticipated to drive the cargo insurance market share in the upcoming years. The cargo insurance for the goods transported via sea routes offers coverage on the damages caused due to bad weather conditions, piracies, loading & unloading of cargo, and others. For instance, in single coverage policies of marine cargo insurance, the coverage is offered on single shipment basis that can be beneficial for the small business owners. Also, for the companies that ship the cargos through shipping lines of airlines can opt for open coverage policy if they have more than one shipment. In addition, the cargo insurance providers can collaborate with insurance companies that can bring innovative technologies such as machine learning, artificial intelligence, and others to streamline the insurance claim submission process. Collaborating with insurtech companies can help the cargo insurance providers in enhancing their service offerings with unique value propositions, exploring alternative distribution channels, and diversifying their product portfolio. All these factors are anticipated to drive the cargo insurance industry growth in the upcoming years.
Some limitations associated with cargo insurance such as claims will not be paid in case of personal interference and high cost of marine insurance are estimated to restrain the market growth. In addition, damage caused to the goods due to poor packaging or flawed products is not covered under cargo insurance. Also, some cargo insurance companies do not cover insurance of any hazardous cargo or expensive and delicate things such as electronic devices which is anticipated to hamper the market growth during the forecast period.
Intense competition among insurance providers encourages innovation and the development of new cargo insurance products. Insurers strive to differentiate themselves by offering tailored coverage, value-added services, and efficient claims processing, which positively impact the cargo insurance market. IoT technology is continuously being incorporated by significant market players into their current marine insurance product lines to improve their offerings. This system facilitates the processing of claims, assists in loss forecasting, and monitors preclusion losses. This immediately expedites streamlined support for maritime insurance. Therefore, it is anticipated that the adoption of IoT in marine insurance by a large number of industry players will boost market growth during the forecast period.
The market for cargo insurance has seen a marginally negative effect as a result of the COVID-19 pandemic. The demand for cargo insurance decreased due to the pandemic-related slowdown in global trade and supply chain disruptions. Due to a significant decrease in the amount of goods being transported, shipment delays, and cancellations, the pandemic disrupted the global supply chains. The need for cargo insurance was decreased during the pandemic as fewer goods were transported. The pandemic also forced many businesses to scale back operations or even temporarily cease operations, which decreased the demand for cargo insurance. The COVID-19 pandemic significantly reduced commercial and maritime activities.
The key players profiled in this report include: Allianz, AXA, Aon PLC, American International Group Inc, Arthur J. Gallagher & Co., Chubb, Lloyd's, Marsh LLC, Zurich Insurance Group Ltd, and Lockton Companies. The market players are continuously striving to achieve a dominant position in this competitive market using strategies such as collaborations and acquisitions.
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