AGCS – fall in shipping losses. Increase in storms

There has been a downward trend in shipping losses over the years, and with a 3% fall in 2014 – 15 with 88 losses of ships of over 100 gross tons globally last year. This is according to a report by insurance company Allianz Global Corporate and Specialty (AGCS) fourth annual Safety and Shipping Review 2016, that analyses reported global shipping losses.

Losses have declined by 45% since 2006, and this reflects increasingly robust safety regulations.

Cargo and fishing vessels accounted for more than half (60%) of the ships lost globally with cargo losses actually increasing for the first time in three years. The most common cause of these losses was sinking, that accounted for 75% of losses – up 25% on 2014 and this was driven by bad weather events.

Cyber risk grows

With the emergence of the ‘internet of things’, there is a real risk that pirates could end up sinking ships by hacking their computer systems.

“Pirates are already abusing holes in cyber security to target the theft of specific cargoes,” says Captain Andrew Kinsey, Senior Marine Risk Consultant, AGCS. “The cyber impact cannot be overstated. The simple fact is you can’t hack a sextant.”

Piracy attacks failed to fall in 2015, the first time in five years. There was an increase in piracy in South East Asia, accounting for 60% of all incidents. These were particularly prevalent off Vietnam.

Storms sink ships

With global weather patterns becoming ever more violent, so super storms are sinking more ships. 2016 is predicted to be the worst of many years with a so called ‘Super El Nino’ emerging in the Pacific that could cause havoc in global weather patterns. Bad weather was a factor in three of the five largest vessels lost last year, including the El Faro, one of the worst US commercial maritime disasters in decades.

“The fact that superstorms are causing ships to sink is concerning,” says Sven Gerhard, Global Product Leader Hull & Marine Liabilities, AGCS. “We are seeing more and heavier natural catastrophe events. Weather routing will continue to be a critical component to the safe navigation of vessels.”