Large Ship Losses Have Reached Their Lowest Point In A Decade

Despite several high profile disasters involving passenger ships over the past few years, the world is now losing fewer vessels at sea than at any point in the past decade. Recently the Costa Concordia disaster, Sewol ferry sinking and Norman Atlantic ferry fire have all brought passenger safety into focus. In 2014, however, just 75 ships were lost compared to 170 in 2007 according to Allianz Global Corporate and Specialty. All in all, 1,271 large vessels have been lost at sea between 2004 and 2014.

For the period between 2009 and 2013, the majority of shipping loss claims have been attributed to machine damage/breakdown, followed by fire, hull damage, collision and storms. Even though the decreasing number of sinkings may seem like good news for insurance companies, the increasing size of container ships may actually lead to bigger losses. The Mediterranean Shipping Co’s MSC Oscar became the largest container vessel in the world this year. Nearly as long as four football fields, it has a 19,224 teu capacity – equivalent to carrying 120 million pairs of sneakers. If a vessel this large encountered a serious mishap, it could cost upwards of $1 billion.

Piracy remains a considerable danger for large shipping, despite the fact that ithas been largely eradicated off the coast of Somalia. However, a new threat is growing in the form of cyber-attacks. Modern vessels are becoming dependent on e-navigation and interconnectivity, opening up the prospect of hacking. Experts have warned that cyber-attacks could affect multiple vessels from the same company and scenarios are now being simulated to test mitigation strategies.


Forbes

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Author: rlpillari

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