Asia Pacific remains top shipping casualty losses in 2018: Allianz

Asia Pacific waters remain the top shipping casualty region accounting for 45% of losses globally in 2018, according to a latest review by insurer Allianz Global Corporate & Specialty (AGCS).

Asia Pacific waters remain a hotspot for marine claims with four of the top 10 loss regions globally in 2018 and half of the top 10 largest losses also occurring in the region, according to AGCS’s Safety & Shipping Review 2019 which looks at shipping losses of over 100 gross tonnes.

The South China, Indochina, Indonesia and Philippines maritime region remains the top loss region. Other top loss regions in Asia Pacific include Japan, Korea and North China, as well as the Arabian Gulf and approaches.

Last year, 21 total losses of vessels were reported in Asia Pacific, down from 46 losses in the previous year, driven by a significant decline in activity in the global loss hotspot, Southeast Asia, and weather-related losses after quieter hurricane and typhoon seasons.

While the plummet in total losses is encouraging, the number of reported shipping incidents overall in Asia actually increased by 22% in the past four years, according to analysis of data from 4,000 insured vessels by AGCS.

However this is more due to the sheer volume of ships that pass through the region, rather than below-par safety standards.

“We do typically see more incidents of groundings and collisions in Asia than other locations around the world, but this generally reflects the higher levels of trade and where ship owners are trading,” said Tom Taberner, regional head of energy & marine Asia Pacific at AGCS.

“In many cases port infrastructure in Asia is new and there are many new or expanding ports in China, Korea, Japan and Malaysia, etc. Newer infrastructure means fewer issues, better port operations and more up-to-date charts, which will address challenges,” Taberner said.

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Cargo ships accounted for more than one-third of vessels lost around Asia Pacific in the past year. Foundered was the major cause, accounting for 14 of the 21 losses regionally – over thrice as many as the next highest cause which is wrecked/stranded.

And while the total losses declined from 46 in 2017 to 21 in 2018, the frequency and cost of collision, grounding and fire incidents have increased in some locations for Asian based-ship owners and managers.

There were 425 collisions or contact incidents during the past 12 months, with the average cost of collision claims highest on containers vessels at $840,000. Overall, collision incidents are the second most frequent cause of claims in the region behind machinery breakdown/engine damage at 462 incidents.

Fire continue to be an issue with 34 reported incidents over four years, at a total cost to the region’s insurance sector of almost $50m.

“We have seen a rise in incidents involving car carriers, which are becoming more expensive. This is a major concern with fires on the Auto Banner in May 2018 and most recently the Sincerity Ace in January 2019,” Taberner said.

Read more: Unfinished business – a poor start to the year for marine safety

Globally, the loss trends are similar to Asia, with 46 large ships lost worldwide in 2018, down from 98 in the previous year.

Looking forward, the review said that the IMO 2020 regulation is likely to be a game-changer for the shipping industry, with wide ranging implications for cost, compliance and crew.

In addition, political risk has also heightened globally and increasingly poses a threat to shipping security, trade and supply chains through conflicts, territorial disputes, cyber-attacks, sanctions, piracy and even sabotage, as evidenced by recent attacks on oil tankers in the Middle East.

The review also highlighted the growing numbers of migrants at sea and an increase in stowaways on commercial vessels also has serious consequences for shipowners, leading to delays, diversions and pressure on crew. In contrast to Asia, piracy incidents increased in 2018 to more than 200 – Nigeria is now the top global hotspot.

Posted 04 June 2019

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Lee Hong Liang

Asia Correspondent

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