Total ship losses lowest in a century, but bigger ships risk bigger losses
TOTAL loss casualties among ships achieved record lows last year - the lowest in a century, according to insurer Allianz Global Corporate & Specialty, reports American Shipper
TOTAL loss casualties among ships achieved record lows last year - the lowest in a century, according to insurer Allianz Global Corporate & Specialty, reports American Shipper.
The latest edition of its annual Safety and Shipping Review also revealed that the 2,698 shipping incidents tallied by Allianz was still only one per cent lower than it was in 2017.
A quarter of the losses last year occurred in South China, Indochina, Indonesia and the Philippines, said the Allianz report.
The insurer also expressed concern that bigger and bigger ships magnified the risk of fires and problems arising from the cap on the sulphur content of marine fuelmandated by the UN's International Maritime Organisation.
Allianz said 46 large ships over 100 gross tonnes were total losses worldwide in 2018, less than half the 98 lost in 2018 and 55 per cent below the 10-year average of 104. The company said that is the lowest number in a century; 15 of the total losses involved cargo ships.
Weather-related total losses were halved during a quieter year of hurricane and typhoon activity, and total losses significantly fell in accident hot spots such as southeast Asia.
Machinery damage and failure accounted for 40 per cent of the 2,698 incidents last year and a third of the more than 26,000 incidents aboard ships over the past decade. That is twice as many as the next highest cause: collision. Machinery damage has resulted in more than US$1 billion in claims in the past five years alone.
'Improved ship design, technology, tighter regulation and more robust safety management systems on vessels have helped to prevent breakdowns and accidents from turning into major losses,' said Allianz's Baptiste Ossena.
But the Nordic Association of Marine Insurers has shown that the most costly one per cent of all claims account for 30 per cent of total claim value.
'Larger vessels mean far greater accumulations of risks and therefore larger values and exposures, both on board vessels and in ports. Dealing with incidents involving large ships, such as fires, groundings and collisions, are also becoming more complex and expensive,' it said.
Problems from low-sulphur fuel could cause a loss of power or control, which could lead to collisions and groundings, it said.
International Union of Marine Insurance (IUMI), statistics show that switchovers between heavy fuel oils and distillate fuels increase the risk of vessels losing power.