The Nordic marine insurance market has recorded another year of premium growth, according to annual figures released by the Nordic Association of Marine Insurers (Cefor).

The growth, particularly in the Nordic hull and machinery market, contrasts with capacity contraction in the London market over recent years.

Cefor’s figures show that total premium earned by Nordic insurers in hull and machinery, protection and indemnity, offshore and cargo reached $1.9bn in 2020, compared to $1.8bn in the previous year.

The biggest increase came in the hull and machinery sector, which increased from $816m in 2019 to $924m in 2020.

Around 87% of Nordic hull and machinery premium is earned by Gard, the Norwegian Hull Club, Alandia, Skuld and the Swedish Club.

All five of these providers saw premiums increase, which is partly attributable to a hardening of the hull and machinery market over the last 12 months.

The largest increase came from Oslo-based Skuld.

Skuld increased its hull and machinery premium income from $54.9m in 2019 to $89m in 2020, according to Cefor’s figures.

Over the past two years, Skuld has moved from providing hull and machinery cover through the Lloyd’s of London market to underwriting the business through its own outlet, Skuld Hull.

Modest P&I increases

P&I premium income earned by Nordic insurers showed more modest gains despite attempts to raise rates in the sector.

Nordic insurance providers increased their P&I income from $916m in 2019 to $917.6m in 2020.

The financial performance of Nordic insurers is likely to be helped by a low level of large claims last year because of decreased shipping activity during the pandemic.

"We have seen an extraordinary reduction in overall claims frequency and cost for the ocean hull portfolio in the past year. This can be linked to the disruption caused by the coronavirus leading to reduced shipping activity in several vessel segments. In addition, the impact of major claims was as its lowest level since 2005," said Helle Hammer, managing director of Cefor.

However, she added that the low claims environment might not last as shipping activity returns to normal.