Why India’s SMEs are riding the marine insurance wave


Sohini Mitter

23 reads

Sohini Mitter

23 reads

Marine insurance isn’t amongst India's most-bought insurance policies. However, it gained ground post the pandemic, with new premiums growing by 50%. As the geopolitical climate remains volatile, more and more small business owners, traders, and exporters are buying protection for their cargo.

December 04, 2023


Key Takeaways

  • Financial losses incurred by companies during the pandemic made them see marine insurance as a vital requirement in today's times, with 80-85% of international trade happening via sea.
  • Cargo insurance is emerging as the most-bought product in this segment, with policy covers protecting not just marine shipments, but also goods transported via road, rail, and air.
  • India's top insurance providers are seeing new policy premiums in this segment grow by 50%, with online searches and queries also rising rapidly.
  • Marine insurance covers can range from Rs 1-100 crore for large corporates to Rs 5-25 lakh for SMEs and MSMEs.

In early 2022, Swiss Commodities International (SCI), a sugar trading company based out of Chhattisgarh, saw a few of its trucks suffer accidents while transporting interstate cargo. Each truck was loaded with commodities worth Rs 10-12 lakh, and the damages would’ve been immense if the company did not have an insurance cover in place. 

SCI Chairman Sanjay Laddha was aware of the risks associated with the trade of “high-value commodities” like sugar, spices, and tobacco, and had already booked a policy online. “We wanted to get commodity insurance, but while looking up on the internet, we came across marine insurance. Until then, we didn’t know that marine insurance also covered cargo transported via road,” he tells The CapTable. 

Swiss Commodities went on to avail cargo insurance with a Rs 10-crore annual cover on PolicyBazaar. So far, the company has made 3-4 claims that have been settled by the insurance aggregator within 10-15 days of the accidents. “For us, the maths is really simple,” Laddha says. “We load 100 trucks and we’re paying a premium of Rs 18,000. That means each truck is getting covered in just Rs 170-180. Isse badi baat kya ho sakti hai (What could be better than this)?” 

In another such instance, Delhi-based Supervac Industries, a manufacturer and exporter of vacuum pump oils, got its insurance claims settled within a month after its cargo was damaged in-transit off Mumbai’s JNPT port. The insurer assessed losses to the tune of Rs 60,000, and settled claims after the submission of proof of loss, bills of lading (the act of loading cargo onto a ship), and cargo receipts. (Supervac had taken a Rs 5-crore annual cover from ICICI Lombard.) 

SCI and Supervac Industries are among a plethora of micro, small, and medium enterprises (MSMEs) in India that have woken up to the pressing need for marine insurance in today’s times, especially if the enterprise is engaged in interstate trade, in-land transfers, and import-export via rail, road, sea or air. This realisation was long overdue, say industry observers, and the COVID-19 pandemic has played a pivotal role. 

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