Asia Pacific waters remain the top region for shipping casualties, accounting for 45% of losses globally in 2018, according to a leading insurer.
Twenty-one total vessel losses were reported in Asia Pacific last year, down from 46 losses seen the year before, said Allianz Global Corporate & Specialty (AGCS).
Allianz said this was driven by a “significant decline in activity” in the global loss hotspot – South East Asia – and weather-related losses after quieter hurricane and typhoon seasons.
“While this plummet in total losses is encouraging, the number of reported shipping incidents overall in Asia actually increased by 22% in the past four years, according to analysis of data from 4,000 insured vessels by AGCS,” the insurer said.
“However, this is more due to the sheer volume of ships that pass through the region, rather than below-par safety standards.”
Tom Taberner, regional head of energy & marine Asia Pacific at AGCS, said: “We do typically see more incidents of groundings and collisions in Asia than other locations around the world, but this generally reflects the higher levels of trade and where ship owners are trading.
“In many cases port infrastructure in Asia is new and there are many new or expanding ports in China, Korea, Japan and Malaysia.
“Newer infrastructure means fewer issues, better port operations and more up-to-date charts, which will address challenges.”
Globally, Allianz said the loss trends are similar to Asia, with 46 large ships lost worldwide in 2018, down 55% from a year ago and 55% below the 10-year-average of 104.
However, the number of reported shipping incidents overall – 2,698 in 2018 – shows little decline, less than 1% year-on-year.
“Just like Asia, machinery damage is a major cause, accounting for more than a third of the 26,000+ incidents over the past decade, and is one of the most expensive causes of marine insurance claims estimated at over $1bn in five years,” Allianz said.
Asia Pacific waters account for four of the top 10 loss regions globally in 2018 and half of the top 10 largest losses also occurred in the region.
South China, Indochina, Indonesia and the Philippines remain the top loss regions, where one in four losses globally occurred in 2018.
“This is however significantly down from 29 a year earlier, marking the first time the region has seen a fall in losses in four years,” Allianz said.
Other top loss regions in Asia Pacific include Japan, Korea and North China, as well as the Arabian Gulf and approaches.
Cargo ships accounted for more than one-third of vessels lost around Asia Pacific in the past year, with foundering accounting for 14 of the 21 losses regionally.
Global results also bear this trend, where sinking accounted for over half of the 1,036 lost ships globally over the past decade, and are the most expensive cause of loss for insurers, accounting for $1.56bn in five years.
Despite a decline in number of total losses, the frequency and cost of collision, grounding and fire incidents has increased in some locations for Asian based-ship owners and managers, said Allianz.
“There were 425 collisions or contact incidents during the past 12 months, with the average cost of collision claims highest on containers vessels at around $840,000,” it said.
“Overall, collision incidents are the second most frequent cause of claims in the region behind machinery breakdown / engine damage which involved some 462 incidents.”
Allianz said fires also continue to be an issue with 34 reported incidents over four years, at a total cost to the region’s insurance sector of almost $50m.
In particular, it said there has been an increase in cargo fires on container ships and car carriers, with a number of notable losses in 2018 and 2019.
“We have seen a rise in incidents involving car carriers, which are becoming more expensive. This is a major concern with fires on the Auto Banner in May 2018 and most recently the Sincerity Ace in January 2019,” said Taberner.
