Surety Marine Assesses Insurance Opportunities on the Middle Corridor

International insurance company Surety Marine, which specialises in marine and financial risks, is assessing insurance opportunities on the Middle Corridor.

This was stated in an interview with Trend by Kirill Patyrykin, CEO of Surety Marine.

"Azerbaijan offers interesting opportunities given its location in the Caspian region and its role in the Middle Corridor, which connects Asian and European markets through a combination of sea and land transport. As companies consider alternative routes, we see potential for cooperation with local insurers, brokers, shipowners and logistics operators to develop insurance solutions tailored to these shipments.

Multimodal transport requires particular attention to the loading and unloading of cargo, temporary storage, transfer between different carriers and continuity of insurance coverage at all stages of transportation. The opportunity lies in creating insurance products that take into account the actual operational characteristics of these routes. The development of these routes will depend on infrastructure, service reliability and commercial efficiency, as well as demand for greater diversification in international trade," he said.

Impact of the changing situation in the Strait of Hormuz on the international marine insurance market

K. Patyrykin assessed the impact of the changing situation in the Strait of Hormuz on the international marine insurance market: "The impact has been very serious. I remember when I first started working in this field, insurance rates for war and attack risks were around 0.1–0.2%. Today, rates for high-risk insurance objects can exceed 20% per year. This shows how dramatically risk perception has changed.

The rise in tensions around the Strait of Hormuz has affected both insurance premiums and insurers' willingness to insure individual voyages on certain terms. Uncertainty about the scale and duration of a conflict can radically change the economic viability of a voyage. In my view, this reflects deeper changes in how the market assesses geopolitical risks. A disruption on one strategic waterway can simultaneously affect vessels, cargo, energy supply and financing. The consequences go far beyond the insurance sector."

Key factors influencing the determination of the insurance premium for a vessel following a specific route

K. Patyrykin also spoke about the key factors currently influencing the determination of the insurance premium for a vessel following a specific route. According to him, the actual level of exposure of the vessel to risk is initially assessed: where it will sail, how long it will remain in a vulnerable zone, which ports it will call at and what cargo it will carry.

"Areas included in the Joint War Committee list are an important reference point for assessing war risks. However, the committee does not set insurance premiums; rates are agreed individually between underwriters and brokers. Underwriters also take into account the vessel's flag, owner, age, technical condition, claims history and management standards, as well as the crew's experience and security training. AIS voyage history, sanctions screening and verified security data help to assess the overall picture.

Threats such as drone attacks and interference with navigation systems require particular attention. Ultimately, the insurance premium reflects the combination of all these factors, the required insurance coverage and the insurer's assessment of the vessel's risk," he emphasised.

The CEO said that Surety Marine differs from traditional insurance companies in its approach to risk assessment and underwriting: "Our approach is based on specialised underwriting and a detailed understanding of each client's business.

Marine insurance covers various business models. For example, P&I mutual clubs provide liability insurance based on collective risk sharing, and this system is supported by the joint risk pool of the International Group and reinsurance mechanisms. This structure plays an important role in the sector.

At Surety Marine, we focus on complex and specialised risks that require individual assessment. We combine technical underwriting with analysis of the vessel's operations, commercial routes and the changing risk environment.

Clients are becoming increasingly sophisticated and demanding when it comes to assessing insurance. They expect clear justification of underwriting decisions, an understanding of the practical specifics of their business and confidence in the scope of insurance coverage. Our approach aims to meet these expectations."

K. Patyrykin also noted that the main risks in marine insurance are no longer limited to physical damage to the vessel, but also include changes in shipping routes and the operating environment: "Marine insurance, especially within liability and cargo insurance, has always covered broader risks than just physical damage to the vessel. A new pressing issue is the interrelationship of physical, operational and geopolitical risks. Even without any damage to the vessel, its voyage can become significantly more complicated or expensive. Route changes, long delays, port restrictions and interference with navigation systems can alter the operating environment.

Longer voyages can also affect fuel consumption, maintenance schedules and crew workload. For an underwriter, these changes are significant because they alter the conditions in which the vessel operates. Therefore, risk assessment must consider the vessel in the context of the broader trading environment. At the same time, it is necessary to clearly distinguish between the risks faced by the business and the losses actually covered by the insurance policy."

Gaps in the global trade insurance model revealed by risks on strategic shipping routes

The CEO also spoke about what gaps in the global trade insurance model have been revealed by the risks that have emerged in recent years in the Strait of Hormuz, the Red Sea and other strategic shipping routes.

"In my view, the most serious gap relates to the financial consequences of business interruption without insured physical damage. A shipowner or cargo owner may incur significant additional costs because a route is dangerous or a voyage is delayed. Coverage of these costs depends on the insurance coverage purchased and the specific terms of the policy. Therefore, companies may find a significant difference between the risks they face commercially and the scope of their insurance coverage.

Another problem is risk concentration. A single regional crisis can affect many vessels and cargoes simultaneously, thereby putting pressure on underwriting capacity and reinsurance.

These events show the importance of clearer definition of expectations regarding the scope of insurance coverage, better assessment of interconnected risks and earlier discussions between clients, brokers and insurers when trading conditions change," he noted.

Speaking about the differences between risk assessment in cargo insurance and hull insurance, K. Patyrykin said that in cargo insurance the focus is primarily on the cargo itself and its vulnerability to loss or damage during transportation: "The characteristics and value of the cargo, packaging, stowage, transport conditions, temperature sensitivity and the planned route, including storage and transshipment from one vehicle to another, are assessed.

The duration of transportation is important, especially for perishable or sensitive cargo. However, standard cargo insurance should not be understood as covering all financial consequences of delay. The Institute Cargo Clauses, depending on their specific terms, generally exclude losses, damage or expenses arising from delay.

In hull and machinery insurance, the focus shifts to the vessel itself: its design, age, classification, condition of machinery, maintenance, management and operating history are taken into account. The assessment includes determining potential damage, repair and restoration costs, and the probability of total loss of the vessel."

Expectations for key changes in the international marine insurance market over the next 2–3 years

In conclusion, the CEO shared his expectations regarding the main changes in the international marine insurance market over the next 2–3 years.

"I think that in the next 2–3 years, artificial intelligence, including large language models, will be more widely integrated into marine insurance underwriting processes. Document review, systematisation of risk data and identification of inconsistencies are areas where these tools can make a significant contribution.

I also expect wider use of satellite data, vessel tracking systems and data from onboard sensors to support voyage assessment, more flexible pricing and continuous compliance monitoring.

These developments will place greater importance on data quality and the ability to explain how information influences decisions. At the same time, human responsibility will remain key.

The introduction of broader monitoring capabilities on vessels, including video surveillance, may also be considered. In my view, such use should have a clear operational purpose and proportionate privacy safeguards. Technology should improve the quality of underwriting decisions and safety while maintaining trust," Kirill Patyrykin concluded.