Marine losses down but two risks are looming

Marine losses down but two risks are looming | Insurance Business

Marine losses down but two risks are looming
The latest marine insurance statistics compiled by the International Union of Marine Insurance (IUMI) show a downward trend in losses but two risks loom large on the horizon.

The Spring Statistics released by the IUMI show that hull losses are trending down at almost historic levels.

“Hull losses show a general downward trend in total loss frequency for most vessel types,” the report states.

“The frequency of total loss since 1997, as a percentage of the world fleet, continues to decrease and has more than halved by both the number of vessels and tonnage.

“However, an overall increase in percentage of the frequency of heavy weather and grounding related total losses is reported.”

In the cargo sector, the latest statistics show that the world economy is on the mend although it “remains volatile and uneven,” with a slowdown in emerging markets such as China and Brazil.

The spring update highlights two key risks that should be taken into account in the cargo sector: spiralling costs of salvage and theft.

“The cost of salvage and wreck removal is also dramatically increasing - it is estimated that Superstorm Sandy is the sixth costliest event in global insurance history.”

“Cargo theft, mysterious disappearance and the misappropriation of cargo is also growing in severity.”

The cargo market holds challenges for marine insurers and brokers and the IUMI warns that a holistic approach to the industry is needed to succeed.

“In general, exposures and risks are growing in size and complexity and these will require stable solutions in the future.”