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A cyberattack could have catastrophic consequences on the marine industry with potential losses from one event up to US$4 billion.
Nicolas Thoreau, regional manager Asia for marine at Allianz Global Corporate & Specialty, said that the marine industry faces a number of challenges and while cyber is still emerging it could have devastating consequences.
“Cyber is an emerging risk, and has the potential to have catastrophic consequences for a business given the right confluence of events,” Thoreau told Insurance Business.
“The challenge facing the industry currently is in budget constraints. Already, crew, training and maintenance budgets are under severe pressure. It is important that the standard practices, such as crew education and identifying measures to back up and restore systems are implemented to reduce cyber risk.”
The industry faces more threats from cyberattacks due to the interconnectivity of the sector, Thoreau continued. As ships in all marine areas become larger, higher losses could also be expected.
With record-breaking vessels hitting the water from cruise liners and cargo companies, a major casualty could cost in the region of US$2 billion to US$4 billion. Add cyber risk to these mega-ships and damage could be astronomical.
“These larger vessels pose more complex challenges, such as around salvage operations and the availability of suitable ports of refuge,” Thoreau continued. “In addition to larger sizes, the rising cost of wreck removal, environmental sensitivities and greater levels of liability and regulation can lead to increased losses.”
In their recent Safety & Shipping Review 2017, AGCS found that large shipping losses have declined by 50% over the past decade, but the industry cannot afford to rest on its laurels.
“An improvement in safety culture has definitely led to lower losses, but it is only part of the cause. The recent downturn in shipping is also likely to be contributing to more benign loss activity due to fewer voyages and an increasing number of vessels in the lay-up,” Thoreau said.
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