The Tide of Change: Trends Reshaping Marine Facultative Reinsurance

Francisco Campos, Head of Marine Facultative Reinsurance, discusses key market trends and recommendations for 2025. 

The marine facultative reinsurance market faces significant challenges in 2025. Rising competition and volatility are pushing companies to offer more competitive terms and diversify investments. In Latin America, the market is evolving, requiring greater specialization. However, it remains a profitable and growing sector with ample opportunities.

Latin America's geographical exposure to hurricanes and tropical storms significantly impacts maritime activities, increasing demand for reinsurance. Climate change has intensified these events, leading to premium and coverage adjustments. Insurers must develop strategies to manage these environmental risks while staying competitive.

At AIG, our specialized underwriters stay attuned to market developments, assessing risks with a deep understanding of regional jurisdictions and geographic characteristics. This expertise allows us to conduct thorough analyses and identify high-risk areas.

Our extensive geographic footprint—spanning 36 territories across Latin America and the Caribbean, as well as the ability to trade with regional and global Hubs —enables us to offer innovative, efficient solutions, particularly for catastrophic events affecting multiple regions.

Diversification of Products and Services

AIG provides a broad range of Marine Facultative Reinsurance products, including:

• Marine cargo, including Stock throughput and Project Cargo including Delay in Start Up.

• Ports and Terminals Operators

• Shipowners and ship repairers

• Contractor’s equipment and construction machinery

• Logistics, warehousing, and cargo handling liability

Key Recommendations for 2025

To navigate market changes and seize opportunities, we recommend:

• Offer innovative products: Develop tailored solutions with predefined triggers.

• Enhance customer experience: Deliver exceptional service to retain and attract clients.

• Diversify investments and products: Broaden offerings to maintain a competitive edge.

• Leverage expertise: AIG’s specialists identify innovation opportunities and process improvements.

Outlook for 2025 and Beyond

The marine facultative reinsurance market will be dynamic and competitive, with rising demand due to global trade expansion and associated risks. Adaptability and informed decision-making will be essential.

Reinsurance cycles are now shorter—historically lasting up to five years, they are now expected to last 18- 24 months—requiring greater flexibility from insurers. Marketers shifting in recent years, driven by climate change, natural disasters, and economic uncertainty, highlights the need for proactive risk management.

As the market stabilizes, reinsurance capacity is expected to grow, balancing supply and demand by early 2026. Diversifying investments and product offerings will help insurers reach a wider client base and mitigate risks. A robust strategy integrating risk analysis, long-term forecasting, and market adaptability is key to ensuring stability and growth in this evolving sector.