Shipping losses have declined by 38 per cent over the last decade, according to insurer Allianz’s Safety & Shipping Review 2018, which analyzes reported vessel losses over 100 gross tonnes.
There were 94 total losses reported around the shipping world in 2017, down 4 per cent year-on year – the second lowest figure in 10 years after 2014. However, the report urges the industry to proceed with caution as it begins to introduce autonomous and low-emissions solutions.
“The decline in frequency and severity of total losses over the past year continues the positive trend of the past decade,” says Baptiste Ossena, global product leader Hull & Marine Liabilities, Allianz Global Corporate & Specialty (AGCS). “However, as the use of new technologies on board vessels grows, we expect to see changes in the maritime loss environment in future. The number of more technical claims will grow – such as cyber incidents or technological defects – in addition to traditional losses, such as collisions or groundings.”
The report finds there are multiple emerging risk exposures for the shipping industry. Ever-larger container ships pose fire containment and salvage issues, meanwhile low-emissions equipment brings new technical risks and the threat of machinery damage. Cyber attacks also remain a serious threat, with last year’s NotPetya hack causing cargo delays and congestion at almost 80 ports.
While technology presents new challenges to the sector, the report notes that 75 to 96 per cent of shipping accidents still involve human error. It is also behind 75 per cent of 15,000 marine liability insurance industry claims analyzed by AGCS – costing $1.6bn. Allianz says that more effective use of data and analytics could help.
“By analyzing data 24/7 we can gain new insights from crew behaviour and near-misses that can identify trends,” says Captain Rahul Khanna, global head of Marine Risk Consulting, AGCS. “The shipping industry has learned from losses in the past but predictive analysis could be the difference between a safe voyage and a disaster.”