Shipping losses lowest for a century

Large shipping losses are now at their lowest level this century having declined by over 50% y-o-y, according to Allianz Global Corporate & Specialty’s Safety & Shipping Review 2019.

In 2018, 46 total losses of vessels were reported around the shipping world, down from 98 12 months earlier, driven by a significant decline in activity in the global loss hotspot, South-East Asia, and weather-related losses (10) halving after quieter hurricane and typhoon seasons.

While this plummet in total losses is encouraging, the number of reported shipping incidents overall (2,698 in 2018) shows little decline – less than 1% y-o-y. Machinery damage is the major cause, accounting for more than a third of the 26,000+ incidents over the past decade – twice as many as the next highest cause, collision. Machinery damage is one of the most expensive causes of marine insurance claims, accounting for US US$1bn+ in five years.

“Today’s record low total loss activity is certainly influenced by fortunate circumstances in 2018, but it also underlines the culmination of the long-term improvement of safety in the global shipping industry,” says Baptiste Ossena, global product leader, hull and marine liabilities, AGCS. “Improved ship design, technology, tighter regulation and more robust safety management systems on vessels have also helped to prevent breakdowns and accidents from turning into major losses. However, the lack of an overall fall in shipping incidents, heightened political risks to vessel security, complying with 2020 emissions rules and the growing number of fires on board bring challenges.”

The annual study analyses reported shipping losses over 100GT. See the next issue of CIR for more detail on this study.

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