AGCS report: traditional property and liability claims have been subdued during lockdowns but this
SINGAPORE - Media OutReach - 15 July 2020 - Asian waters accounted for a third of a large vessels lost at sea globally, even as large shipping losses are at a record low having fallen by over 20% year-on-year, according to specialty insurer Allianz Global Corporate & Specialty SE's (AGCS) Safety& Shipping Review 2020. However, the coronavirus crisis could endanger the long-term safety improvements in the shipping industry for 2020 and beyond, as difficult operating conditions and a sharp economic downturn present a unique set of challenges.
"Coronavirus has struck at a difficult time for the maritime industry as it seeks to reduce its emissions, navigates issues such as climate change, political risks and piracy, and deals with ongoing problems such as fires on vessels," says Baptiste Ossena, Global Product Leader Hull Insurance, AGCS. "Now the sector also faces the task of operating in a very different world, with the uncertain public health and economic implications of the pandemic."
The annual AGCS study analyzes reported shipping losses over 100 gross tons (GT) and also identifies 10 challenges of the coronavirus crisis for the shipping industry which could impact safety and risk management. In 2019, 41 total losses of vessels were reported around the world, down from 53, 12 months earlier. This represents an approximate 70% fall over 10 years and is a result of sustained efforts in the areas of regulation, training and technological advancement, among others. More than 950 shipping losses have been reported since the start of 2010.
Top loss locations and most affected ships
According to the report, the South China, Indochina, Indonesia and Philippines maritime region remains the top loss location with 12 vessels in 2019 and 228 vessels over the past decade -- one in four of all losses. The Japan, Korea and North China region saw 2 vessels lost in 2019 and is the third largest loss location overall with 104 since 2010. High levels of trade, busy shipping lanes, older fleets, typhoon exposure, and safety issues on some domestic ferry routes are contributing factors. However, in 2019, losses declined for the second successive year, mirroring a global trend.
Cargo ships (15) accounted for more than a third of vessels lost in the past year, most of them in South East Asian waters. Foundered ships (sunk/submerged) were the main cause of all total losses, accounting for three in four (31). Bad weather accounted for one in five losses. Issues with car carriers and roll-on/roll-off (ro-ro) vessels remain among the biggest safety issues. Total losses involving ro-ros are up year-on-year, as well as smaller incidents (up by 20%) -- a trend continuing through 202.
"The rise in number and severity of claims on ro-ro vessels is concerning. Ro-ros can be more exposed to fire and stability issues than other vessels," says Khanna. "Many have quick turnarounds in port and a number of accident investigations have revealed that pre-sail away stability checks were either not carried out as required, or were based on inaccurate cargo information. Too many times commercial considerations have endangered vessels and crews and it is vital that this is addressed on shore and on board."
Number of smaller shipping incidents on the rise
While total losses continue to see a positive trend, the number of reported shipping incidents (2,815) increased by 5% year-on-year, driven by machinery damage, which caused over one in three incidents (1,044). A rise in incidents in the waters of the British Isles, North Sea, English Channel and Bay of Biscay (605), meant it replaced the East Mediterranean as the top hotspot for the first time since 2011, accounting for one in five incidents worldwide. Similarly, incidents in the South China, Indochina, Indonesia and Philippines region also increased by 21 year-on-year for a total of 255 in 2019, making it the third highest region.
"We cannot lose sight of the fact that, while total losses have reduced significantly, the total number of incidents increased year-on-year," says Ossena. "It does not take much for a serious incident to result in a total loss and, hence, the warning signs are there."
There were almost 200 reported fires on vessels over the past year, up 13%, with five total losses in 2019 alone. Mis-declared cargo is a major cause. Taking steps to address this issue is vital as it will only worsen as vessels become bigger and the range of goods transported grows. Chemicals and batteries are increasingly shipped in containers and pose a serious fire risk if they are mis-declared or wrongly stowed.
The shipping industry has continued to operate through the pandemic, despite disruption at ports and to crew changes. While any reduction in sailings due to coronavirus restrictions could see loss activity fall in the interim, the report highlights 10 challenges that could heighten risks. Among these are:
"Ship-owners also face additional cost pressures from a downturn in the economy and trade," says Captain Rahul Khanna, Global Head of Marine Risk Consulting at AGCS. "We know from past downturns that crew and maintenance budgets are among the first areas that can be cut and this can impact the safe operations of vessels and machinery, potentially causing damage or breakdown, which in turn can lead to groundings or collisions. It is crucial that safety and maintenance standards are not impacted by any downturn."
Geopolitical tensions and cyber impact shipping safety
Meanwhile, events in the Gulf of Oman and the South China Sea show political rivalries are increasingly being played out on the high seas and shipping will continue to be drawn into geopolitical disputes. Heightened political risk and unrest globally has implications for shipping, such as the ability to secure crews and access ports safely. In addition, piracy remains a major threat with the Gulf of Guinea re-emerging as the global hotspot, Latin America seeing armed robbery increase and renewed activity in the Singapore Strait.
Ship-owners are also increasingly concerned about the prospect of cyber-conflicts. There has been a growing number of GPS spoofing attacks on ships, particularly in the Middle East and China, while there have been reports of a 400% increase in attempted cyber-attacks on the maritime sector since the coronavirus outbreak.
Other risk topics in the AGCS Safety & Shipping Review include:
About Allianz Global Corporate & Specialty
Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.
Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world's largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.
Worldwide, AGCS operates with its own teams in 32 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,450 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally.
Cautionary Note Regarding Forward-Looking Statements
The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements.
Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The matters discussed herein may also be affected by risks and uncertainties described from time to time in Allianz SE's filings with the U.S. Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement.
AGCS report: traditional property and liability claims have been subdued during lockdowns but this
Safety and Shipping Review 2019: Asia Pacific waters remain top shipping loss region, led by South
• Safety & Shipping Review 2018: Globally 94 large ships lost in 2017, down by more than a
Engage your senses for an immersive theatrical experience in the comfort of your home SINGAPORE - M
LONDON - EQS Newswire - 23 October 2020 - EML Payments is a specialist payment solutions provider wi
"Following Kpop, K-Drama is mesmerizing global fans--now on Twitter" Twitter announces