“The number of fires on board large vessels has increased significantly in recent years, with a string of incidents involving cargo, which can easily lead to the total loss of a vessel or environmental damage,” mentioned Régis Broudin, AGCS world head of marine claims. “At the same time, the shipping sector is also having to deal with many other challenges including a growing number of disruptive scenarios, supply chain issues, inflation, time-pressured crew members and employees, increasing losses and damages from extreme weather events, implementing new low-carbon technology and fossil fuels, as well as Russia’s invasion of Ukraine.”
Fires have been chargeable for 18% of the worth of marine claims analyzed by AGCS for a complete of round €1.65 billion (about US$1.7 billion), up from 13% for the five-year interval ending in July 2018. AGCS discovered that the mis-declaration – or non-declaration – of harmful cargo was a contributing issue to the heightened fireplace danger. The report additionally mentioned {that a} spike in engine room fires may spotlight underlying dangers involving crew competency.
Inflation a danger driver
With many international locations reeling from inflation charges of round 10%, inflation is exacerbating already-existing traits driving a rise in claims severity, AGCS mentioned. The climbing costs of metal, spare components and labour are pushing up the price of hull restore and equipment breakdown claims.
The worth of cargo and vessels has additionally been rising amid rising publicity for bigger ships, the report mentioned. The whole worth of the worldwide service provider fleet rose 25% to US$1.2 trillion final 12 months. The common worth of container shipments has additionally been on the rise.
“It is not unusual to see one container valued at US$50 [million] or more for high-value pharmaceuticals,” AGCS mentioned.
Damage claims
Damaged items have been probably the most frequent explanation for marine insurance coverage claims and the third-largest by worth, the report discovered. While the most typical claims are for bodily injury, the variety of theft and temperature-variation claims has additionally been on the rise.
“The risk of theft and damage to high-value cargos needs to be addressed with additional risk mitigation measures, such as GPS trackers and sensors that provide real-time monitoring on position, temperature, moisture shock and light and door openings, for example,” mentioned Capt. Rahul Khanna, world head of marine consulting at AGCS. “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 cargos where the cargo interest was underinsured by as much as US$20 million.”