• 2022 November 23 15:47

    Allianz Global Corporate & Specialty reveales top causes of marine insurance claims

    Fire, collision and sinking, and damaged cargo are the top causes of marine insurance losses by value, according to Allianz Global Corporate & Specialty’s analysis of more than 240,000 claims worth €9.2bn in value.

    Inflation is compounding existing trends driving higher claims severity. Soaring prices for steel and spare parts and rising labor costs are impacting hull repair and machinery breakdown claims.

    Supply chain issues continue to impact claims, as does climate change through extreme weather events and new exposures linked to the net-zero transition.

    Fire and explosion incidents cause the most expensive insurance claims in the marine industry, while at a time of rising exposures and inflation, cargo damage is the most frequent cause of loss, according to Allianz Global Corporate & Specialty (AGCS). The marine and cargo insurer analyzed more than 240,000 marine insurance industry claims worldwide between January 2017 and December 2021, worth approximately €9.2bn in value, and has identified a number of claims and risk trends that are driving major loss activity in the sector. Inflation is another key concern for marine insurers and their policyholders as recent increases in the values of ships and cargos mean losses and repairs are becoming more expensive when things go wrong.

    Fires accounted for 18% of the value of marine claims analyzed (equivalent to around €1.65bn) compared with 13% for a five-year period ending July 2018. A contributing factor to this increase of fire risk on board vessels is often mis-declared/non-declaration (of) dangerous cargos, while a recent increase in engine room fires may reveal some underlying risk around crew competencies. The potential dangers that the transportation of lithium-ion batteries on vessels pose only add to these concerns, with AGCS having already seen a number of incidents.

    With many countries seeing rates at or around 10%, inflation is compounding existing trends driving higher claims severity. The rising prices of steel, spare parts and labor are all factors in the increasing cost of hull repair and machinery breakdown claims.

    In addition, the value of both vessels and cargo has been increasing at a time of growing exposures associated with bigger ships, the largest of which can carry 20,000 containers at one time. The combined value of the global merchant fleet increased 26% to $1.2trn in 2021 while the average value of container shipments has also been rising with more high-value goods such as electronics and pharmaceuticals. It is not unusual to see one container valued at $50mn or more for high-value pharmaceuticals.

    Damaged goods, including cargo, is the top cause of marine insurance claims by frequency, and the third largest by value, the AGCS analysis shows. The most common claims are physical damage, typically from poor handling, storage and packing. However, recent years have also seen a number of high-value theft and temperature variation claims – the latter can particularly impact pharmaceuticals. Theft is the third most frequent cause of claims with criminals targeting consumer electronics and high-value commodities such as copper. Cargo is typically stolen from ports, warehouses or during transits. The recent boom in container shipping has also affected cargo claims with a global shortage having resulted in substandard and damaged containers being brought back into use resulting in losses.

    AGCS also identifies a number of risk trends in the analysis that are likely to impact loss activity in the marine sector – both today and in the future:

    Sources of disruption continue to increase: Recent years have seen a number of maritime incidents, natural catastrophes, cyber-attacks and the Covid-19 pandemic cause major delays to shipping and ports. Further disruption has also been caused by congestion, labor shortages and constrained container capacity. There are also greater concentrations of cargo risk on board large container vessels and in major ports, so any incident has the potential to simultaneously affect large volumes of cargo and companies.

    Commercial pressures are already a contributing factor in many losses that have resulted from poor decision-making. With the pressure on vessels and crew currently high, the reality is that some may be tempted to ignore issues or take shortcuts, which could result in losses.

    Climate change is increasingly affecting marine claims: Natural catastrophes is already the fifth biggest cause of marine insurance claims, by frequency and severity according to AGCS analysis. Extreme weather was a contributing factor in at least 25% of the 54 total vessel losses reported in 2021 alone, while drought in Europe during 2022 again caused major disruption to shipping on the Rhine. In the US, it dropped inland waterways around the Mississippi River to levels not seen for decades, impacting global transportation of crops such as grain.

    A more sustainable, greener approach in shipping sector is needed, but comes with risks: Efforts to decarbonize the shipping industry, which is a major contributor to global greenhouse gas emissions (GHGs) will also impact claims going forward. Reducing GHGs requires the shipping industry to develop more sustainable forms of propulsion and vessel design and use alternative fuels. As much as the introduction of new technology and working practices is needed to move to a low-carbon world, it can result in unexpected consequences – insurers have already seen a number of machinery breakdown and contaminated fuel claims related to the introduction of low sulfur fuel oil in recent years as part of the move to cut sulfur oxide emissions. Machinery breakdown is already the fourth largest cause of claims by frequency and value.

    Impact of Russia’s operation in Ukraine: The shipping industry has been affected with the loss of life and vessels in the Black Sea, trapped vessels in blocked Ukrainian harbors and the growing burden of sanctions. Although the signing of the ‘Black Sea Grain’ Initiative in July 2022 enabled some vessels trapped in ports to move out of the conflict zone others remain. The full value of these trapped vessels is unclear, but industry reports have estimated it could be as much as $1bn. Under some marine hull and cargo insurance policies an insured party may be able to claim for a total loss after a specific time has passed since the vessel/cargo became blocked or trapped.




2024 March 19

12:10 MOL, Idemitsu, HIF team up to develop e-fuel/e-methanol supply chain
11:42 MAN CEON digital platform receives Cyber Security Product Design Assessment certification from ABS
11:23 “K” Lline begins participating in joint study on liquefied CO2 marine transportation
10:48 Port of Los Angeles container volume increases 60% in Feb 2024
10:24 PortXL signs a partnership agreement with MINDbase
09:47 IMO to open regional office in Fiji to serve the Pacific

2024 March 18

18:13 Brunvoll propulsion chosen for ESVAGT's growing fleet of SOVs
17:42 ADNOC signs second long-term Heads of Agreement for Ruwais LNG Project
17:37 Cemre Marin Endustri shipyard holds launching ceremony for CMAL's MV Isle of Islay
17:24 Fortescue successfully conducts world’s first use of ammonia as a marine fuel in a dual-fueled ammonia-powered vessel in the Port of Singapore
17:02 APL updates on European Union’s Import Control System 2
16:03 MED Marine contracted to build MED-A2575 series tug for SVS Maritime
15:31 Hanwha Ocean and BV join hands to develop a 270K LNG carrier
15:17 HD Korea Shipbuilding awarded contracts for three VLACs
14:18 Port of Skagen and Stillstrom partner to decarbonise anchorage zone with offshore charging solutions
13:22 Sanmar delivers 6th battery electric power tugboat to Norwegian operator
13:16 COSCO SHIPPING Lines announces the launch of OCEAN Alliance DAY 8 product this year
12:21 Dutch offshore wind farm approved by LR
11:39 ClassNK awards first-ever notation for improvements in living and working environment to Fuyo Kaiun's bulk carrier "ELETTRA"
11:31 Davie strengthens Québec’s shipbuilding industry by supporting the reorientation of AFCDC
10:44 Storylines and Brodosplit shipyard renew ship building contract to construct private residence ship
10:25 BOEM announces environmental review of proposed wind energy project offshore New Jersey
09:51 First ‘flying’ electric ferry to debut in New Zealand in 2025

2024 March 17

16:31 Norwegian Shipowners' Association names Harald Fotland as its President
15:22 ABS Wavesight Nautical Systems now supports fully digital, streamlined SIRE 2.0 inspections
14:15 TechnipFMC selected by NEP to deliver the first all-electric iEPCI for CCS
13:03 US sanctions shipping company, targeting Iran and Houthi rebels
11:01 The first hybrid electric vessel built in South America will use a Corvus battery system
09:47 Kalmar and Forterra sign JDA for autonomous terminal tractor

2024 March 16

16:24 The Netherlands selects Naval Group for its submarine replacement program
15:41 Equinor exercises options to extend four-year drilling contracts
14:17 GONDAN Shipbuilders hosts launching ceremony for Edda Wind's CSOV C503
13:47 Van Oord, Van Aalsburg partner to further develop circular fascine mattresses
12:13 Snam wins "A" raing in CDP's Suppliers Engagement Rating for efforts against climate change
10:54 ULSTEIN unveils new subsea vessel for offshore energy tasks

2024 March 15

18:07 DNV gives nod to Friede & Goldman BargeRack solution
18:02 New partnership enables faster offshore wind installations in the U.S.
17:53 First production line at ‘World’s Largest Monopile Factory’ to go live in July
17:21 Brunvoll DP2 upgrades for more Mokster vessels
16:55 CMA CGM to suspend its calls at Port au Prince, Haiti
16:03 GEFO's LNG DF chemical tanker Tosca gets Green Award
15:19 CEVA Logistics develops new vehicle logistics business at the Port of Dunkirk
14:11 MPA: SaR operation continues for a missing crew member of the Liberia-flagged UTOPIA
13:07 To develop the Far East it makes sense to build a new shipyard in the country’s eastern regions, President Putin said
12:48 World’s first use of ammonia as a marine fuel in a dual-fuelled ammonia-powered vessel in the Port of Singapore
11:39 COSCO Shipping calls Port of Genoa, Italy with 20,000 TEU vessels on regular basis
10:03 DMC contracted to supply rudder systems for the world’s largest PCTCs

2024 March 14

18:04 Shearwater awarded seismic survey for UK carbon capture and storage project
17:15 UAE, world leaders discuss maritime corridor for aid to Gaza
16:05 Marine fuel sales at Singapore drop to a three-month low in February
15:43 World Shipping Council selects NCB for liner shipping Cargo Safety Program
15:00 ZIM reports results for 2023
14:57 DP World announces 2023 results
14:29 HaiSea unveils new operations facility for the world’s greenest tugboat fleet
13:44 DEME awards KENC with engineering and fabrication scope on multiple offshore wind installation projects
13:25 MABUX: Bunker Outlook, Week 11, 2024
12:43 Wartsila Lifecycle Agreement to support optimised low-emission operations for two P&O Ferries vessels
11:35 Hapag-Lloyd transport volumes up by 0.5% to 11.9 million TEU in 2023
10:51 NYK and Astomos Energy christen new dual-fuel LPG carrier
10:25 Port of Long Beach container volume up 24.1% to 674,723 TEUs in Feb 2024

2024 March 13

18:02 Lebanese, French officials float a plan to rebuild Beirut port nearly 4 years after huge explosion
17:23 Ascenz Marorka obtains type approval for cyber-security from Bureau Veritas for its digital solutions
16:58 USDOT announces $500 mln for ports available through the Port Infrastructure Development Program
15:44 RINA wins contract to create global investment plan for cruise sector
15:23 Hede International Shipping enters the Transpacific container trade
14:43 Concordia Damen wins contract to deliver a CDS2410 River Pusher to Transporte Fluviales Frey Bentos
14:13 CMA CGM Group launches its first loyalty program SEA REWARD
13:13 Cargill posts results of the six-month test period of the world’s first wind-powered ocean vessel
12:24 Rotterdam's Gate Terminal sees need for more LNG bunkering capacity at Rotterdam
11:58 MOL announces delivery of LNG-fueled car carrier CERULEAN ACE