Shipping losses and casualties decreased overall in 2016 by about 16 percent, according to a new report from Allianz Global Corporate and Specialty (AGCS), but Allianz warned that the maritime industry – and their insurers — shouldn’t expect entirely smooth sailing in the future due to regional disparities, regulatory constraints, and cyber risks.
“We continue to see improvements in maritime safety, but the price of safe navigation is constant vigilance,” said Captain Andrew Kinsey, senior marine risk consultant at AGCS. “The maritime sector is entering a period of considerable change and unrest from economic pressures, technology and political factors. There is a perfect storm of increasing regulation and narrowing margins.”
AGCS noted that the decline in losses – which amounts to a 50 percent drop in large shipping losses over the last decade – can be attributed in part to better regulation but may also reflect a downturn in shipping activity. Global losses may have decreased but losses were actually up in many regions including the traditional maritime loss “hotspot” – the South China, Indochina, Indonesia and Philippines region, as well as Japan, Korea and North China; East African Coast; South Atlantic and East Coast South America; and the Canadian Arctic and Alaska.
AGCS warned “there is no room for complacency” on any of the challenges facing the shipping industry. Piracy and crew kidnapping continue to be a problem, as do political risk and environmental considerations. Harder economic times have also fallen on shippers, with bankruptcies and cost-cutting potentially leading to poor vessel maintenance and crew negligence. AGCS commented that maintenance-related claims have increased, becoming one of the top causes of liability losses.
This story in an excerpt of the original. The content originally appeared in Professional Front Page News.
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Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].
