Although the marine market saw significant fluxuations as a result of COVID-19, declining oil and gas prices, and international trade sanctions, 2021 promises new opportunities. The Biden Administration's plan for significant transportation, infrastructure and green energy investment, including key ports, terminals and offshore wind projects, bodes well for the marine industry.
Furthermore, President-Elect Joe Biden's support of the Jones Act, which reserves U.S. coastwise trade to U.S. vessels, should spur new investment in the U.S. marine market. With the incoming administration's plan to reinstate many environmental protections, the marine market will also face greater pressures for environmental compliance, use of cleaner fuels and efficiency. These changes, as well as the renegotiation of trade agreements, will impact the marine industry and have ripple effects into the marine and associated insurance markets.
Over the past year, the marine insurance market has sustained substantial losses due to numerous storms and large casualties, resulting in limited capacity and higher rates. With the COVID 19 pandemic still raging as well as rising geopolitical sanctions and threats, the recent boom in political risk insurance to support offshore projects is expected to continue. Likewise, with the Biden Administration's focus on the environment, pollution and environmental risk coverage will be critical. Cybersecurity coverage, which is excluded from many marine policies, also is a crucial consideration that can protect maritime companies as cyberthreats continue to escalate worldwide. As the above circumstances show, unforeseen events can also dramatically affect conditions in the upcoming four years. (See Holland & Knight's previous alert, "Marine Insurance in the Trump Presidency: Smooth Sailing in 2017?", Jan. 12, 2017.)
In sum, new marine opportunities are expected to emerge under the incoming administration, but the marine and insurance markets will continue to face a variety of complicated challenges in the coming months.
20 Posts in 20 Days Leading to Inauguration Day on Jan. 20
Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Joe Biden's inauguration, with insights as to likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.
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