Asia’s marine insurers face rising losses from climate labour risks

Extreme weather frequency hits its highest level in 5 years whilst crew shortages strain operations.

Marine insurers in Asia need to strengthen risk advisory, pricing and underwriting strategies as environmental, labour, technology and geopolitical pressures reshape the sector, according to a new report by QBE Asia, part of QBE Insurance Group Limited.

The report, Braving New Worlds: The QBE Marine Insurance Risk Outlook for Asia 2026, outlines key risks affecting shipping, ports, logistics providers and marine insurers across the region, based on six months of research and input from underwriters and risk engineers, supported by external data.

Environmental pressures are identified as a growing concern. Data shows that the frequency of extreme weather events has increased, with the highest number recorded in the past five years compared to any period since 1900. 

Rising sea temperatures are also affecting vessel performance by straining cooling systems and increasing the risk of machinery failure. 

Operators expanding into routes such as the Northern Sea Route are also facing unfamiliar conditions and limited emergency response infrastructure.

The report also flags ongoing labour shortages as a key operational risk. 

It estimates that over half of seafarers are likely to change employers within the next three years, whilst the global fleet could face a shortfall of nearly 90,000 officers in 2026. 

Fatigue linked to understaffing and long working hours is contributing to incidents, with around 25% of marine casualties attributed to tiredness.

Technology risks are uneven across the sector. Larger, intercontinental operators face pressure to adopt alternative fuels such as hydrogen and ammonia, which introduce new technical risks due to limited industry experience. 

These operators are also more exposed to cyber threats due to increased digitalisation. In contrast, smaller, local operators tend to have lower levels of digital adoption and face more opportunistic rather than targeted cyber-attacks.

Geopolitical and economic pressures continue to affect trade flows and insurance costs. US tariffs and sanctions could reduce shipping volumes and suppress carrier revenues, whilst higher goods costs are feeding through to increased cargo insurance premiums. 

Ongoing conflicts, including those in the Middle East, are disrupting shipping routes, raising security costs and contributing to higher freight rates and operational delays.

Cargo-related risks remain significant, particularly from mis-declared goods. 

The report notes that container ship fires increased from 26 in 2020 to 40 in 2023. 

Around a quarter of serious incidents on container vessels are linked to mis-declared cargo, and an estimated 18,000 containers at sea each day may contain incorrectly declared goods.