Ship fire claims spike to highest in a decade as larger vessels add to risks

Individual hull insurance claims exceeding $50m were reported for the first time in more than a decade in 2023 following fires on vessels, according to the Nordic Association of Marine Insurers (Cefor).

The claims — based on Cefor data covering 46% of the global fleet of vessels larger than 20,000 gt — demonstrated the continuing concerns about fires on ships and the trend towards bigger and more valuable ships. The previous year brought only one claim above $30m, and the year before that none.

Danaos scraps container ship following fatal fire that killed two seafarers

Read more

The figures also highlighted the outsize impact of fires on ships for insurers.

While fires represented just 2.7% of claims last year for the trade association’s members, they amounted to 27% of the total cost of the claims, according to Cefor’s annual hull fleet and casualty claims report.

The report does not detail individual cases, but high-profile global hull claims in 2023 included the fire on board the 6,210-ceu Fremantle Highway (built 2013) in July off the coast of the Netherlands, leading to the evacuation of the crew and the death of one seafarer.

The cause of the fire remains under investigation. TradeWinds reported last year that hull insurers faced a payout of $70m to $80m for the ship.

The analysis from Cefor reported eight losses above $10m last year, half of them attributed to fires. The two largest claims topped $60m.

Astrid Seltmann, data specialist for Cefor, said that increased concerns over fires on vessels since 2019 were a product of ever-larger container ships carrying more cargo with a greater risk of something self-igniting.

“One of the challenges is to detect if a fire is starting somewhere in the containers — and it’s a big challenge to distinguish in the cargo area,” she said.

The industry has also raised concerns of growing risks for carriers and ro-ros from electric vehicles with batteries that are seen as potentially more risky than traditionally fuelled cars.

A committee at the International Maritime Organization last month proposed a plan to improve fire safety systems for ships carrying electric cars. It also considered measures including thermal imaging systems to detect and tackle fires on container ships.

Cefor warned of potentially increasing claims because ships are becoming older and bigger and travelling further.

Trade routes have lengthened owing to geopolitical disruption, such as the war in Ukraine and Houthi attacks on commercial shipping in the Red Sea.

Seltmann said Cefor expects the cost of parts to rise in 2024, increasing the costs of repairs and hull and machinery claims.