1. The global cargo insurance market reached $22.64 billion in 2024, growing 1.6% from 2023, and is projected to reach $106 billion by 2032 with a 4.1% CAGR. Europe leads with 37.68% market share, while Asia-Pacific grows fastest at 35.15% due to e-commerce and regional trade.
2. Geopolitical and environmental risks such as the Ukraine war, Red Sea disruptions, inflation, and climate-driven disasters (floods) have increased premiums and triggered stricter underwriting.
3. Common coverage includes fire, explosion, collision, storms, piracy, theft, mishandling, and salvage costs. Exclusions are inherent vice, ordinary leakage, delays, war, strikes, and cyber risks unless specifically added. Recent risk shifts include rising fire incidents from lithium batteries and EVs, surging cargo theft, more frequent floods, and cyberattacks like ransomware.
4. Frequent causes of claims are cargo damage from mishandling or poor packing, wet damage from flooding or condensation, reefer failures causing spoilage of perishables, theft of electronics, and fire incidents tied to lithium batteries.
5. Demand is rising for specialized insurance, including reefer cargo coverage (25% of claims), hazardous goods like lithium batteries, high-value goods such as electronics and EVs, and parametric policies for fast payouts on weather or supply chain disruptions.
6. Digitalization and new technologies are transforming the sector: AI enables faster underwriting and predictive risk modeling, IoT reduces losses through real-time monitoring, and blockchain supports fraud prevention and embedded insurance. Regulatory changes such as IMDG Code updates (2026), the EU Cyber Resilience Act (2026–27), GDPR expansions, and EU CBAM will further shape the market.
7. In the next 5–10 years, cargo insurance will be highly digitized with parametric models using IoT data for instant payouts, premium discounts for eco-friendly practices, and expansion through InsurTech and embedded insurance platforms. The market could reach $106 billion by 2032.
8. Cargo owners and shippers are advised to assess risks regularly, select appropriate coverage such as all-risk or parametric policies, work with insurance experts to identify gaps, and embed insurance into logistics workflows for efficiency.
9. The biggest misconceptions are that forwarders’ liability fully covers cargo value (it does not, as liability is usually very limited), and that all risks are automatically covered (war, strikes, and cyber require endorsements). These misconceptions often lead to underinsurance and significant uncovered losses.
Source:
https://www.hapag-lloyd.com/en/online-business/digital-insights-dock/insights/2025/09/expert-talk-global-cargo-insurance-market-in-the-age-of-digitalization.html
