The number of vessels lost worldwide in 2018 was 46 vessels, the lowest this century and an annual decline of more than 50%, according to a newly released report.
The fall in the number of vessels lost was revealed in the Safety and Shipping Review 2019, issued on 4 June by Allianz Global Corporate & Specialty (AGCS), which noted that foundering was the primary cause of 65% of losses in 2018, and has been the cause of more than 50% of vessel losses in the past decade.
South China, Indochina, Indonesia and Philippines region was the global hotspot for losses in 2018, with 12 vessel losses – nonetheless a significant fall on 29 in 2017, and the first time the region has seen a decline in losses for four years. The eastern Mediterranean and Black Sea region was the second most frequent loss location.
Climate change may lead to new loss scenarios, with the development of arctic shipping routes, unseasonal high summer waters in the US and record low levels on the Rhine and Elbe identified as potential sources of trouble.
Despite the significant decline in losses, the number of casualties or incidents is still an issue and has declined by less than 1% to 2,698 in 2018. The east Mediterranean and Black Sea is the top hotspot for incidents, with one in five casualties or incidents taking place there. The top cause of incidents is machinery damage and failure, accounting for 1,079, or 40% of those recorded in 2018.
Misdeclaration of cargo is believed to be responsible for growing numbers of cargo fire incidents, and large container ships are identified as a particular area of concern.
“The greater the number of containers stowed, the more chance there is of a mistake, such as storing dangerous cargo close to a hot spot like the engine,” said AGCS global head of marine claims Régis Broudin, adding “Meanwhile, the size of the vessel can make it harder to access a fire and impede attempts to extinguish it.”
The report also noted that while increasing connectivity and using technology is an overall positive for safety and claims, an overreliance on technology can also be a cause of accidents.
Insurers have raised concerns about the potential for frequency and cost of machinery breakdown claims to increase following the introduction of low-sulphur fuels to comply with IMO’s 2020 sulphur cap, the report noted, adding that there are also worries that higher-priced fuels may lead to cost cutting in areas like crew training and maintenance.
On the security front, AGCS noted cyber losses will be an increasing feature of marine-related claims and called for more contingency planning and stress testing of systems. Piracy incidents increased by 12% to 201 in the past year and Nigeria has replaced Indonesia as the global hotspot, the location of 48 incidents, or nearly 25% of the total.