FACTORS such as fires, inflation, and climate change are leading to larger insurance claims for the industry, according to Allianz Global Corporate & Specialty (AGCS), reports Ventura, California's gCaptain.
Fire and explosion are the most expensive driver of claims activity, surpassing sinking and collision.
Of AGCS' analysis of 240,000 industry claims over the past five years, fires accounted for 18 per cent of the value of marine claims analysed.
The number of fires on board large vessels has increased significantly in recent years, with incidents involving cargo fires and explosions.
Allianz also noted the recent threat from lithium-ion batteries in cargo that is not stored, handled, or transported correctly.
Li-ion battery and electric vehicle fires burn easily, can be difficult to extinguish, and are capable of randomly reigniting days after they have been put out.
'Shipping losses may have more than halved over the past decade (54) total losses at the end of 2021 compared to 127 at the end of 2012, according to the AGCS Safety & Shipping Review 2022), but fires on board vessels remain among the biggest safety issues for the industry,' said AGCS global head Captain Rahul Khanna.
'The potential dangers that the transportation of lithium-ion batteries pose if they are not stored or handled correctly only add to these concerns, and we have already seen a number of incidents.'
Salvage and wreck removal costs have been rising, but inflation is compounding existing trends driving higher value claims.
'We see more high-value goods being shipped by container while the average cost of goods rises with inflation,' said Mr Khanna.
'It is not unusual to see one container valued at US$50 million or more for high-value cargoes like pharmaceuticals. These high-value cargos need additional risk mitigation measures, such as GPS trackers and sensors that provide real-time monitoring on temperature, moisture shock, and light and door openings, for example. At the same time, cargo interests need to keep a close eye on insured values. Clients may need to adjust their insurance and policy limits, or risk being underinsured - we have already seen claims for high-value container cargoes where the cargo interest was underinsured by as much as $20 million.'
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Fire and explosion are the most expensive driver of claims activity, surpassing sinking and collision.
Of AGCS' analysis of 240,000 industry claims over the past five years, fires accounted for 18 per cent of the value of marine claims analysed.
The number of fires on board large vessels has increased significantly in recent years, with incidents involving cargo fires and explosions.
Allianz also noted the recent threat from lithium-ion batteries in cargo that is not stored, handled, or transported correctly.
Li-ion battery and electric vehicle fires burn easily, can be difficult to extinguish, and are capable of randomly reigniting days after they have been put out.
'Shipping losses may have more than halved over the past decade (54) total losses at the end of 2021 compared to 127 at the end of 2012, according to the AGCS Safety & Shipping Review 2022), but fires on board vessels remain among the biggest safety issues for the industry,' said AGCS global head Captain Rahul Khanna.
'The potential dangers that the transportation of lithium-ion batteries pose if they are not stored or handled correctly only add to these concerns, and we have already seen a number of incidents.'
Salvage and wreck removal costs have been rising, but inflation is compounding existing trends driving higher value claims.
'We see more high-value goods being shipped by container while the average cost of goods rises with inflation,' said Mr Khanna.
'It is not unusual to see one container valued at US$50 million or more for high-value cargoes like pharmaceuticals. These high-value cargos need additional risk mitigation measures, such as GPS trackers and sensors that provide real-time monitoring on temperature, moisture shock, and light and door openings, for example. At the same time, cargo interests need to keep a close eye on insured values. Clients may need to adjust their insurance and policy limits, or risk being underinsured - we have already seen claims for high-value container cargoes where the cargo interest was underinsured by as much as $20 million.'
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