ZURICH (Bloomberg) — Total global marine insurance premiums dropped two percent in 2009 as insurers were hurt by a drop in trade volumes.

Global premiums for hull, cargo, marine liability and offshore energy insurance reached about $22.9 billion last year, according to a presentation by the International Union of Marine Insurance in Zurich yesterday.

The volume of world merchandise exports fell 12.2 percent last year as global trade values dropped 23 percent, according to the union.

There is an "elasticity of global trade and merchandise export", said Cedric Charpentier, the chief underwriting officer for cargo insurance at Axa SA's corporate solutions unit and head of the union's facts and figures committee. "The drop in value in 2009 will not be overcome by the growth in GDP."

Premium income from cargo insurance policies, which protect the owner of goods being transported over water from losses, dropped 7.7 percent as trade volumes collapsed because of the credit crisis. Cargo insurance booked its first loss since 2000, Charpentier said.

Ocean hull insurance, which covers damage to the vessel or the frame of the vessel, increased 4.6 percent as the world fleet grew by four percent to about 50,000 vessels and seven percent in tonnage. The IUMI said the world fleet may grow another seven percent this year.

"Hull insurance has been technically at a loss for 14 consecutive years," caused by more supply than demand, Peter Mcintosh, chairman of IUMI's ocean hull committee, said in a media presentation in Zurich yesterday. "There are too many hull underwriters out there competing for the business."

IUMI said it does not monitor the effect of piracy on global marine insurance premiums.