Latest figures from Nordic Association of Marine Insurers (Cefor) show that shipping’s claims frequency is continuing to fall, with the exception of fire-related claims.
Its figures show that last year machinery, collision, contact and grounding claims fell again, but fire-related claims bucked the downward trend, and remained consistent.
Alarmingly there has been an increase in fire-related container ship claims over $500,000.
Commenting on its latest statistics Cefor said: “The year 2021 does not show any trend change in the frequency of fires. Contrary to other types of casualties, it stays at about the same level as in 2019 and 2020, confirming that fires behave differently from other types of casualty. A particularly worrying trend is the increase in the frequency of fires over $500,000 on container-carrying vessels.”
Cefor’s analysis comes shortly after the danger was highlighted by two devastating fires already this year, on the 6,400-ceu car carrier Felicity Ace (built 2005), and 33,588-gt Euroferry Olympia (built 1995).
Overall claims costs related to fires and explosions increased from 13.3% of total claims costs between 2016 to 2020, to 19.3% in 2021.
Larger container ships face the highest risk as they are more likely to be carrying product that is prone to ignite, while the potential damage is also increased.
“The larger the number of containers on board, the higher the probability that at least one of the containers could contain something that self-ignites and causes a fire. Moreover, the larger the vessel, the more severe the consequences of the worst-case fire scenario on this vessel will be,” Cefor said.
Cefor pointed out that cargo and engine room related fires should be considered separately.
Engine room fires on container ships showed a particularly significant increase between 2020 and 2021, while cargo-related fires showed a lower increase.
Another area for concern highlighted by the Cefor figures is the potential for future inflationary pressure on claims.
The dramatic rise in steel costs, it pointed out, “may affect future hull repair costs,” while supply chain issues are also adding to higher costs for insurers.
It said the inflationary trend has not yet been reflected in the 2021 claims figures, but it expects to see some impact next year.
Last year was also the first year since 2008 that there was an increase in insured values at annual renewal. Container ships showed a whopping 30% increase in value in the 2021 renewal reflecting the increase in asset values in the sector and the boom in freight rates.
