LONDON — The global hull and machinery insurance market has recorded 17 consecutive years of pure underwriting losses, and overcapacity and competition in the market are likely to continue.

To return to profitability, underwriters likely need to increase rates and turn away business, experts say.

Many marine hull and machinery underwriters have been underpricing risks, said Lars Rhodin, chairman of the International Union of Marine Insurance's ocean hull committee and managing director of the Swedish Club, a protection and indemnity mutual based in Gothenburg, Sweden.

The hull and machinery market is not simply in a soft market, it is in “a prolonged coma,” said Andrea Cupido, head of marine hull for Italy and Continental Europe at Swiss Re Corporate Solutions, a unit of Swiss Re Ltd., in Genoa, Italy.

“We need underwriting discipline, to get back to basics,” Mr. Cupido said.

“Most hull underwriters would testify that underwriting discipline is required and is being exercised, but the figures tell us a different story,” said Mr. Rhodin. “Do we know the risk, and can it be adequately priced?”

Tom Bolt, director of performance management at Lloyd's of London, told delegates at last week's IUMI conference in London that many business plans for marine hull needed to be “more realistic” and that many underwriters are failing to adequately price risks.

Even headline-grabbing losses, such as the sinking of the Costa Concordia cruise ship and Superstorm Sandy, have not resulted in rate increases large enough to return the sector to profitability, said Just-Arne Storvik, founder and senior partner of London-based ReCap Solutions.

Currently, much of the pricing of marine hull risks is “unsophisticated and not exposure-based,” Mr. Storvik said.

Hull underwriters may be behind the curve in assessing and pricing risks, he said.

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For example, exposures associated with ever-larger vessels may not be well understood, he said, and the market also may be underestimating the long-term cost of regulation, among other factors.

The market needs to become more transparent and share information on losses — and even on near-misses — to correctly price such risks, he said.

Underwriters need better access to data and improved calibration of models, noted Lloyd's Mr. Bolt.

“Statistics are the key to the future. They are the most precious asset we have,” said Mr. Rhodin.

“We all know that prices are inadequate. We're a laughingstock. Brokers laugh at us, shipowners take advantage of us,” said Peter Townsend, a director and head of London marine at Swiss Re Corporate Solutions in London. “We all know it, but we perpetuate it.”

He argued that “a weak market is not good for anyone,” including shipowners, since underwriters do not differentiate sufficiently between good and bad risks.”

Underwriters need to properly use the tools available to them and share claims data to create better models, said Tord Nilsson, senior manager for underwriting and special risks at the Swedish Club.

“We need to be disciplined enough to turn away business if the price is not acceptable,” he said.