The Ripple Effects of Inflation
Across the Ocean Marine Insurance Industry
A Conversation with Great American's Marine Experts
Inflation has touched nearly every aspect of the marine industry, from vessel and marina values to repair costs, claims handling and long-term underwriting strategy. To better understand what these trends mean for agents, insureds and the industry, we spoke with five Great American Ocean Marine professionals: Rick Salway, Luxury Yacht Underwriting; Tim Van Hemert, Ocean Marine Underwriting; Lauren Alles & Scott Kramer, Ocean Marine Claims; and Glenn Smith, Loss Control. Their perspectives show how collaboration across disciplines can help marine businesses prepare for rising costs and changing exposures.
What is driving marine inflation today?
Rick Salway: The inflation story in marine insurance goes well beyond the Consumer Price Index. Rising labor costs, shrinking shipyard capacity, supply chain pressures, transportation expenses, tariffs and a shortage of skilled marine professionals all play a role. Many of these costs are increasing faster than insurance pricing, creating a gap between what risks actually cost and what stakeholders may expect them to cost.
Lauren Alles/Scott Kramer: From a claims perspective, we are seeing pressure on both property and liability exposures. Vessel and infrastructure repairs cost substantially more, while social inflation continues to increase settlements, verdicts and defense costs. Marine surveyors, technical experts and specialized legal counsel are also more expensive.
Glenn Smith: At marinas, higher construction, labor, fuel, transportation and specialized-equipment costs are especially visible. Docks, bulkheads, fuel systems, boat lifts, security systems and electrical systems are substantially more expensive to maintain, repair or replace than they were only a few years ago.
Tim Van Hemert: The uncertainty makes underwriting more difficult. Inflation affects both physical damage and liability losses, so we must consider changing conditions each time we evaluate a new account or renewal.
Where are values falling behind reality?
Van Hemert: In some vessel classes, particularly older passenger vessels, purchase price and actual market value can differ significantly. An owner may acquire a vessel at a depressed price while surveys support a much higher value. That disconnect creates unique underwriting challenges and may increase total-loss potential.
Salway: In the luxury yacht segment, agreed values are generally well maintained. The greater concern is what sits within those values. Electronics, machinery and specialized components now make up a larger share of a vessel's overall value, and they are among the fastest-rising costs in a claim.
Alles/Kramer: Valuation issues often remain hidden until a major loss. Assets that are five to fifteen years old can be especially vulnerable when values have not been revisited. Significant upgrades, aging surveys and changes in local repair costs can all create gaps.
Smith: For marinas, the greatest gaps often involve aging facilities. Docks, piers, fuel dispensing systems, electrical distribution networks, travel lifts, boat-storage structures and dredging-related improvements may be undervalued. Warning signs include values that have not been reviewed in three to five years, older appraisals, unreported facility upgrades or limits that appear inconsistent with current construction pricing.
How has inflation changed the cost and duration of a marine loss?
Alles/Kramer: Claims cost more and take longer. Salvage operations, transportation, repair facilities, surveyors and technical experts are all more expensive. Capacity among specialized providers remains limited, so even relatively straightforward claims may require more time to resolve.
Salway: A repair that once took 45 days may now take 90 days or more. Longer cycles generate additional storage and yard fees and can create secondary exposures while vessels remain at repair facilities.
Smith: Marina losses face similar pressures. After a hurricane, fire or dock collapse, qualified marine contractors and electricians may be difficult to secure. Treated timber, steel pilings, floating-dock components, marine-grade electrical equipment and fuel-system parts can have long procurement times. The result may be prolonged operational interruptions, greater business-income exposure and a longer path back to full operations.
What happens when maintenance and risk management do not keep pace?
Alles/Kramer: When insured values fall behind, insureds may discover after a loss that recovery costs exceed the limits purchased. Disputes may also arise when deferred maintenance contributes to damage and the claim turns on whether the cause was a covered peril or deterioration over time.
Smith: Inflation can lead marina operators to defer electrical work, dock repairs, pile replacement and fuel-system improvements. Those delays can increase the likelihood of fire, structural failure, water intrusion, pollution events and storm damage. A relatively minor maintenance deficiency today can contribute to a much larger loss later.
Van Hemert: That is why physical inspections and loss control are so important. Experienced professionals evaluating a vessel, marina or operation can develop a clearer understanding of actual conditions than applications and questionnaires alone provide.
Salway: Risk management is not only about preventing losses. When standard maintenance is delayed due to inattention or cost savings, loss frequency and severity can increase significantly. Strong maintenance practices help control the ultimate financial impact to customer and insurers.
How are underwriting, claims, and loss control working together?
Salway: One of our strengths is the close exchange of information across our various disciplines. We frequently discuss emerging loss trends, repair costs, inspection findings and claim drivers that ultimately influence deductibles, pricing, coverage terms and risk selection.
Alles/Kramer: Inflation raises the stakes on nearly every claim decision. Repairs that once made economic sense may now become constructive total losses. Accurate valuations, technical expertise and proactive planning are more important than ever.
Smith: Loss control adds a pre-loss view by focusing on condition assessments, catastrophe preparedness, preventive maintenance and business-continuity planning. During and after a loss, planning may also need to address contractor shortages, debris removal, temporary operations, phased reconstruction, and the added cost and time associated with upgrades.
What practical steps can agents and insureds take?
Smith: Successful risk management requires ongoing collaboration among insurers, agents and marine operators. Values and replacement costs should be reviewed regularly, especially for docks, fuel systems, electrical systems and other major infrastructure. Operators should document capital improvements, maintain preventive-maintenance programs, establish pre-event contractor and emergency-response agreements and incorporate hurricane, flood and severe-weather planning into routine operations.
Alles/Kramer: Open communication before a loss helps everyone understand what has changed and where new gaps may exist. Updated surveys, appraisals, maintenance records and documentation of improvements can support better decisions throughout the life of the policy and claim.
Van Hemert: Agents play an important role in prompting these conversations at renewal rather than waiting for a loss to reveal outdated assumptions. Asking what has been added, upgraded, replaced or deferred can help keep coverage aligned with the actual exposure.
Looking ahead, what should the industry prepare for?
Van Hemert: The next challenge may be talent. Marine insurance is highly specialized, and many experienced professionals are approaching retirement. Technology and AI will support the industry, but they will not replace marine expertise.
Alles/Kramer: Vessels and facilities are also becoming more complex. Advanced navigation, electronics, stabilization equipment, alternative propulsion and connected electrical systems may improve operations while increasing repair complexity and claim costs.
Smith: Over the next three to five years, aging marina infrastructure, weather-related catastrophes, environmental requirements and continued pressure on construction and labor are likely to affect exposure values and claim severity. More frequent valuation reviews, resilience investments, storm-hardening measures, condition monitoring and well-documented maintenance programs can help operators withstand a loss and recover more effectively.
Salway: Costs are unlikely to move backward. Whether we are discussing labor, fuel, materials, technology or emerging risks, the long-term direction remains upward. Success will depend on identifying changes early, adapting thoughtfully and maintaining discipline through both hard and soft market cycles.
Final Takeaway
Preparation matters. Strong valuation practices, open communication, proactive maintenance and collaboration among underwriting, claims, loss control, agents and insureds can help marine businesses respond to an increasingly complex cost environment. Agents strengthen that protection by helping insureds keep values current, document improvements, plan for disruptions and understand evolving exposures. At Great American, expertise and long-term stability remain central to how we approach these challenges.