Tough market conditions and increasing economic concerns are raising the risk of crew negligence, inadequate vessel maintenance, and underperforming cyber safeguards in the maritime industry, warns insurer Allianz (AGCS).
More than a quarter of shipping losses in 2016 (23) occurred in the South China, Indochina, Indonesia and Philippines region. Bad weather, poor maintenance, weak enforcement of regulations and overcrowding are all contributing factors to loss activity in Asia. Founderings were the cause of half of all losses last year.
Meanwhile, over a third of shipping casualties during 2016 were caused by machinery damage. “Crew negligence and inadequate vessel maintenance are two potential areas of increasing risk, particularly if ship-owners opt to recruit crew with less experience and training, or choose to stretch maintenance work to the longest possible intervals in order to save money,” says Duncan Southcott, global head of marine claims at AGCS.
In an effort to address this issue, Allianz suggests the implementation of new navigational and monitoring technologies, such as black box technology. Safety-enhancing technology such as electronic navigational tools and shore-based monitoring of machinery is already impacting shipping, reducing the impact of human error. Insurers such as AGCS are in the early stages of working with ship-owners to utilise voyage data recorder (VDR) analysis to improve safety. “VDR data is already used in accident investigation, but there are also important lessons to be learned from analysing everyday operations, as well as crew behavior and decision-making in near-misses,” says Captain Rahul Khanna, head of marine risk consulting at AGCS.
Notably, AGCS analysis states that human error and machinery breakdown that could be preventable by the employment of these systems accounts for approximately 75% of the value of almost 15,000 marine liability insurance claims over five years; equivalent to over $1.6bn. However, it notes that over-reliance on technology carries its own risks, with crew choosing to trust digital inferences over their own training and common sense.