Top Facts You Didn’t Know About Logistics Insurance market & Impact of COVID-19

Posted by Mrudula Anil Karmarkar on August 14th, 2023

San Francisco, 14 August 2023: The ReportLogistics Insurance Market Size, Share & Trends Analysis Report By Coverage Type (Cargo Insurance, Marine Services Liability), By Industry (Transportation, Marine), By End User, By Region, And Segment Forecasts, 2023 - 2030

The global logistic insurance market size is expected to reach USD 70.46 billion by 2030, expanding at a CAGR of 2.8% from 2023 to 2030, according to a new report by Grand View Research, Inc. With the surge in e-commerce activities, logistics companies are handling a larger volume of shipments, and this increases the risk of loss or damage. This makes logistics insurance an essential component of risk management, providing coverage against potential financial losses resulting from various incidents that may occur during the transportation of goods.

The use of digital technologies has favorably impacted the logistics insurance market. Logistics companies have adopted digitalization to facilitate gathering and analyzing data on shipments, which has provided valuable insights into potential risks and trends. This information has enabled logistics insurance companies to develop insurance products and pricing models that are more customized to the actual risks faced by logistics companies, resulting in accurate and effective risk management.

Logistics insurance companies are adopting the latest technologies to improve their service offerings, increase operational efficiency, and enhance customer experience. One of the key technologies that logistics insurance providers are adopting is automation, which involves the use of software to perform repetitive tasks and streamline processes. This includes automated underwriting and claims processing, which reduces the time and resources required to manage insurance policies and claims.

The COVID-19 pandemic had a slightly negative impact on the logistics insurance market. The pandemic has created significant uncertainty for logistics companies and insurers, making it difficult to assess and manage risk. This uncertainty resulted in insurers being more cautious in underwriting new policies, which limited the growth of the market.

 The transportation industry's rapid growth in emerging economies is expected to favorably impact the logistics insurance market. As the transportation industry expands, the volume of goods transported also increases, leading to a higher risk of damage or loss during transit. The increased risk makes logistics insurance important for both shippers and carriers. Additionally, the transportation infrastructure may be less developed in emerging economies than in established markets, creating additional cargo risks during transit. For instance, poorly maintained roads, inadequate security, and limited access to technology can increase the risk of cargo theft, damage, or loss. In such scenarios, logistics insurance becomes critical to protect the interests of all parties involved.

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Logistics Insurance Market Report Highlights

• The cargo insurance segment dominated the market in 2022. The adoption of cargo insurance is increasing owing to the various risk involved in the transportation of goods and cargo including theft, damage, and loss which can result in significant financial losses for logistics companies. According to a study by Verisk Analytics’ CargoNet, in 2022 there was a 15% increase in the number of supply chain risk events, which reached 1,778 across the U.S. and Canada and cargo theft rose by 20%. The total loss value for the year 2022 in U.S. and Canada was USD 223 million.
• The marine segment dominated the market in 2022. Marine transportation plays a crucial role in global trade by moving valuable commodities like oil, gas, and raw materials. Therefore, marine cargo insurance is essential to safeguard the economic interests of stakeholders, including shippers, insurers, and other participants in the supply chain. This highlights the importance of insurance for the marine industry for preventing these losses and has led to the growth of the segment.
• The enterprises segment dominated the market in 2022. The dominance of the segment can be attributed to enterprises’ significant volume of shipments and valuable cargo, which exposes them to higher risks of loss, damage, or theft.
• Europe dominated the market in 2022. Europe has a well-developed logistics infrastructure, including seaports, airports, and rail and road networks. Additionally, Europe has a high concentration of multinational corporations that have extensive supply chains and require comprehensive insurance coverage, creating significant demand for logistics insurance.

Fintech has had a positive impact on the logistics insurance market. Fintech companies have introduced new technologies, such as big data analytics, machine learning, and artificial intelligence, improving risk management in the logistics insurance market. This has enabled insurers to assess risks better and provide the best-suited insurance policies. In the logistics insurance market, big data analytics is used to collect data on various factors such as transportation routes, types of cargo, weather conditions, and other factors that could affect the likelihood of a loss. By analyzing this data, insurers can identify risk factors and take appropriate measures to reduce the risk of losses.

Logistics Insurance Market Report Scope

List of Key Players in the Logistics Insurance Market

• American International Group, Inc.
• Allianz
• DB Schenker
• Peoples Insurance Agency
• United Parcel Service of America, Inc.
• AXA SA
• Thomas Miller Group
• Concord
• AsstrA-Associated Traffic AG
• Arch Group