Cargo underpins every industry – and if it moves, it carries risk. In today’s complex economy and volatile marine cargo market, traditional insurance often falls short in managing trade disruptions and exposures. Even in a buyer-friendly environment, where insurers compete aggressively, carriers remain cautious, limiting volatility by offering smaller lines while chasing growth in riskier segments.
“This tension - between buyer demand for stability and insurer appetite for limited risk - is fuelling the need for innovative risk capital strategies. With geopolitical pressures, shifting trade routes and weather-related disruptions adding to volatility, Aon’s alternative risk capital solutions enable buyers to tap third-party balance sheets, unlocking new capital and fresh approaches beyond conventional indemnity cover,” explains Natalie Cooper, senior marine and aviation broker at Aon South Africa.
“By shifting the focus from simply reducing cost of risk to optimising capital allocation, this approach helps organisations strengthen marine cargo risk management while capturing greater long-term value,” she adds.
Global Volatility and its Impact on Marine Cargo Risks
In 2025, South African businesses are navigating an increasingly volatile marine cargo landscape shaped by tariffs, trade route disruptions and environmental risks.
- Tariffs and Trade Pressures - South Africa is contending with a 30% US tariff hike - a significant blow for an economy heavily reliant on imports and exports. Rising trade costs, coupled with global tariff wars between the U.S., China and the EU, are straining supply chains and squeezing margins. For many local businesses, higher procurement costs and financing pressures demand more agile strategies to keep goods moving.
- Red Sea Diversions - With the Suez Canal still crippled by ongoing conflict in Yemen, vessels continue rerouting around the Cape of Good Hope. While this places South Africa directly on a critical global shipping lane, it comes at a cost: longer transit times, delays and higher freight rates. For importers and exporters alike, the “delay factor” remains a pressing risk — one that is often excluded from traditional marine cargo cover.
- Weather and Environmental Risks - Extreme weather events are compounding these pressures. From droughts affecting canal routes to flooding across major agricultural and manufacturing hubs, climate-driven disruptions are no longer exceptions but constants. For South African trade, which depends on both stable ports and predictable transit, these risks underline the urgent need for adaptive and innovative marine cargo solutions.
A Shift in Thinking: Risk Capital as a Strategic Tool
In today’s uncertain economy, with weather extremes and global trade volatility reshaping supply chains, businesses need to reframe marine cargo insurance solutions to seamlessly integrate a risk capital approach into the mix. “Insurers are cautious, limiting cover and tightening terms, leaving businesses looking for alternative solutions to manage risk and allocate capital across multiple jurisdictions, in new ways,” says Natalie.
“The risk capital approach reframes risk management as a source of strategic value, not just a line item of cost. By tapping into alternative capital - alongside traditional markets - businesses can access broader, more flexible solutions for exposures such as trade disruption, delays, non-damage business interruption, supply chain breakdowns and even emerging risks tied to new technologies like electric vehicle logistics,” she explains.
Key tools include:
- Parametric solutions – fast payouts based on triggers, improving cash flow certainty.
- Self-Insurance Vehicles (Captives, Cell Captives or Contingency Policies) – offering greater control and customisation.
- Insurance-linked securities & structured solutions – unlocking third-party balance sheets for capacity.
- Facultative reinsurance – tailored placements for hard-to-cover risks.
This data-driven, capital-agnostic approach allows risk buyers to build bespoke programs that go beyond risk transfer, strengthening resilience, optimising capital and unlocking value in the process.
Six Ways to Strengthen Marine Cargo Risk with a Capital Approach
As South African businesses take a more sophisticated view of marine cargo risk, the need goes beyond buying cover: It’s about smarter capital allocation and solutions. These six steps can help organisations turn risk into a value driver:
- Think capital, not transactions – shift from buying insurance as a product to using it as a strategic lever.
- Stay agile – adapt insurance strategies to navigate shifting tariffs, trade volatility and geopolitical uncertainty.
- Look beyond traditional markets – explore alternative capital solutions and new sources of capacity.
- Leverage data – use analytics to understand exposures and design more tailored protection.
- Adopt innovation – consider parametric solutions and other tools that respond directly to disruptions like delays or supply chain breakdowns.
- Stay connected globally – an agnostic, borderless view of capital opens access to wider, more resilient solutions.
“Partnering with experienced risk advisors ensures companies understand their full range of options — from traditional markets to alternative risk solutions — and how best to integrate them into a resilient, future-ready marine cargo program,” Natalie concludes.
