Inland Marine Insurers Post 11-Year-Low Loss Ratio in ’25 As Competition Builds

Inland marine insurers posted their best underwriting performance in more than a decade in 2025, with the line’s net loss and loss adjustment expense ratio reaching an 11-year low, according to AM Best.

The line has outperformed the total property & casualty industry’s loss and LAE ratio by more than 20 percentage points annually over the past four years, and 2025 also produced the lowest combined ratio and highest profit margin of the past 11 years, AM Best found. The sustained profitability, AM Best said, reflects underwriters’ ability to keep pace with increasingly complex risks even as the size and scope of projects requiring the coverage have grown.

Inland marine covers goods transported across land and inventory stored at temporary off-site locations, requiring specialized expertise, which underlies the segment’s consistent profitability, according to the report. Inland marine insurance also covers on-site materials for construction projects and special high-value items, including but not limited to fine arts, computers, television, video and sound equipment, and medical diagnostic equipment, the rating agency  said.

Historically, AM Best said, there has been an 80/20 split between commercial inland marine exposures, such as freight or property on the move, and personal inland marine exposures, which include high-value niche items like fine arts, jewelry, and collectibles. Up until 2024, the coverage line had included pet insurance.

Growth Driven By Inflation, Not Volume

Direct premiums written in inland marine have grown steadily but unremarkably, AM Best found, with the exception of a sharp rebound in 2021 following pandemic-related declines in marine transit and event cancellation exposures in 2020. The Biden administration’s Infrastructure Investment and Jobs Act (IIJA), a five-year statute authorizing $550 billion in new investments in roads, bridges, public transportation, water systems and broadband, fueled some of the premium growth in marine projects in 2022 and 2023, according to the report.

An apparent drop in inland marine direct premiums written in 2024 was misleading, AM Best said, because that was the year pet insurance began being reported as its own line separate from inland marine. On a like-to-like basis, total inland marine direct premiums written actually increased in 2024, according to the report. Pet insurers wrote more than $5 billion in premium in 2025, AM Best noted.

Two core exposures underlying the line, goods in transit and construction spending, have been relatively flat, AM Best found. The U.S. Freight Transportation Services Index, which the report uses as a proxy for goods-in-transit exposure, has shown only modest year-over-year growth over the past three years.

Construction spending has fallen slightly since peaking in 2024, though AM Best noted an uptick in the second quarter of 2026 whose significance remains unclear. Because inland marine pricing is tied to the value of goods in transit or construction materials, inflation has created what AM Best described as “a natural inflationary trend built into pricing that helps sustain the growth of the inland marine market.”

As the IIJA winds down, public infrastructure spending could decline further, potentially reducing demand for inland marine coverage, according to the report.

Market Concentration Eases As Competition Grows

Liberty Mutual and CNA remained the top two inland marine writers in 2025, with $4.35 billion and $2.56 billion in direct premiums written, respectively, according to AM Best’s rankings. But the gap between those two insurers and the next three, Allianz US, Chubb INA Group and Zurich Insurance US, has narrowed in recent years, the report found. More than 75% of Allianz US’s $2.4 billion in inland marine premium came from travel insurance written through Jefferson Insurance Company, AM Best said, a business that has benefited from a rebound in consumer travel since the pandemic.

Overall, the top insurers in the line hold less market share than they did five years ago, AM Best found, a trend the report attributed largely to the reclassification of pet insurance rather than any real shift among leading carriers. AM Best said the line’s profitability is likely to attract additional capital, adding further competitive pressure that could weigh on pricing and margins going forward.

New Complexities: Data Centers And Cyber-Enabled Cargo Theft

The report identified data center construction as an emerging source of complexity for inland marine underwriters. These warehouse-sized facilities require extensive cooling, backup power and fire suppression systems, and their builders’ risk coverage differs substantially from other projects because of the scale of energy infrastructure involved, according to AM Best.

The transition from an in-progress data center construction project to a fully operational facility is a critical juncture, the report said, since business interruption, water damage and cyber exposures become prominent once a facility goes live, while inland marine exposure should end at that point.

AM Best also pointed to transportation-related cyber exposures, noting that criminals have created falsified bills of lading to pose as legitimate trucking companies and steal shipments, producing significant financial losses for policyholders and insurers alike.

Obtain the full report here. &