Three big claims this year have damaged hull and machinery insurers’ underwriting performance.
TradeWinds’ estimates suggest that the three losses will have set back insurers close to $100m.
The largest claim came with the scuttling of the 300,000-dwt Stellar Banner (built 2016) off the coast of Brazil. It grounded shortly after leaving Vale’s Ponta da Madeira terminal in February. The insured value is understood to have been close to the market valuation of about $60m.
Another big loss came when the 4,900-ceu Hoegh Xiamen (built 2010) was destroyed by a fire at the Blount Island Marine Terminal in Jacksonville, Florida, in June. The owner, ship investment company Ocean Yield, said it would receive a payout of around $26m from insurers.
The 203,100-dwt Japanese bulker Wakashio (built 2007), which grounded off Mauritius in July, had a market value of $13m to $15m at the time.
Further heavy claims were sustained through higher-than-average bulker groundings, due to a combination of low rainfall and silting at the Parana River in South America.
The high-cost losses came at a time when a downturn in shipping trade due to the impact of coronavirus had been expected to reduce casualties and claims.
However, there are worries that overworked crew, who cannot get home because of Covid-19 travel restrictions, could lead to a higher casualty rate.
There is also a concern that low freight rates may encourage shipowners to cut back on maintenance.
In its annual review of casualties, marine insurer Allianz said: “We know from past downturns that crew and maintenance budgets are amongst the first areas that can be cut and this can impact the safe operations of vessels and machinery, potentially causing damage or breakdown, which in turn can lead to groundings or collisions.”
