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Insurers study cruise ship sinking scenario

Tue 12 Sep 2017 by Martyn Wingrove

Insurers study cruise ship sinking scenario
Costa Concordia was the last example of a major cruise ship casualty

Maritime insurers in London are working with a major UK research institute to develop scenarios for dealing with passenger ship casualties.

Lloyd’s of London is working with Cambridge University in developing realistic maritime disaster scenarios, said insurance group Sompo Canopius head of marine liability Charles Fernandez. He explained that the two scenarios under development are the sinking of a cruise ship and a collision between a cruise ship and a tanker.

Some of the information used in these scenarios come from actual casualties, such as Costa Concordia, which capsized off Italy in January 2012. This accident was estimated to have cost more than US$1.5Bn, the majority of which was picked up by Lloyd’s of London insurers, said Mr Fernandez.

Information from these scenarios could be used for testing rescue and salvage operations, including the use of tugs, and dealing with insurance claims. 

During a seminar at Lloyd’s of London this week, Mr Fernandez also highlighted the future challenges to marine insurance, such as tackling cyber threats and risks from unmanned shipping.  

In another presentation, AmTrust at Lloyd’s head of marine Peter Townsend highlighted the risk that the larger size of cruise ships generate. He explained that cruise ships with more than 4,000 passengers would generate considerable risk, rescue and salvage challenges.

Mr Townsend questioned whether the salvage industry has enough capacity to deal with a major cruise ship casualty far from a coastline. He asked the same question of the salvage industry about dealing with a grounded 22,000 TEU container ship.

“Support services are inadequate,” Mr Townsend said. “Our needs are not matched by existing salvage capabilities. We need greater investment in salvage and we need to address the root cause of these problems.”

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