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Total Losses in Hull insurance market: a new-all time low

In 2022, 38 ships were lost globally, implying an improvement over 2021, when total losses were 59. Overall, total losses have dropped more or less steadily over the past decade, with a 65% decrease from those incurred in 2013 (when as many as 109 ships were lost at sea) and an even more comforting figure if compared to the 1990s, when the number of losses reached much higher levels, averaging 200 ships each year.

This situation, according to most insurers’ claims that the reduction in losses is basically attributable to the increased attention paid to safety measures and technological improvement of ship units.

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However, while total losses have decreased over the past year, unfortunately the number of reported marine claims or accidents has increased (albeit slightly); indeed, 3032 claims occurred in 2022 compared to 3000 in the previous year. One data point, however, that we need to consider is the 20% increase in fires that occurred in 2022 (209 fires, the highest figure since 2013).

In addition, a fact that needs to be taken into account is that the decline in freight rates and the decrease in freight demand risks to heavily impact the quality of maintenance activities and risk budgeting, also negatively impacting the decarbonization process that aims toward the so-called Net-Zero.

Finally, one last aspect that insurers should not overlook is the willingness of shipowners, mainly of container fleets, toward increasing transport capacity (since 1968 increased by 1500%; currently there are more than 50 container ships with a capacity of more than 21,000 TEU). In fact, the increase in size not only does not lead to a proportional increase in premium or deductible, but also leads to greater exposure to risks of various types such as, for example, fire or loss of cargo or to increased salvage costs.

marine hull insurance shipping

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alberto.testino1996

alberto.testino1996

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