Marine hull losses continue to fall, says IUMI, but cargo trends are worrying

Associations, Marine Insurance, News, Reports — By on April 9, 2014 at 1:18 PM
The fore part of the former "MOL Comfort" on fire and a fire fighting tug trying to put the fire off - photo crdits The Indian Navy

The fore part of the former “MOL Comfort” on fire and a fire fighting tug trying to  douse the blaze – photo credit  The Indian Navy

Marine hull losses continue to fall, says IUMI, but cargo trends are worrying – By James Brewer

 Total hull losses as a percentage of the world fleet have fallen to a record low, according to Spring 2013 calculations by the International Union of Marine Insurance.

Frequency of such casualties declined in 2013, to stand at a record low of 0.13% in terms of numbers and 0.05% in terms of tonnage, detailed statistics showed.

Although the frequency of total losses for ships above 500 gt had increased marginally in 2012, the trend overall of reduced total losses over the last 15 years continued, said IUMI.

The number of major incidents including total losses continued to decline in 2013. The major single cause of serious losses remains incidents occurring to the machinery and in the engine room. This category represents 35% of cases. Navigation – in terms of groundings and collisions  – stands for almost half of the claims in terms of numbers. Vessels older than 25 years generated 35% of the losses.

Age appears to be more of relevance in regard to total losses of dry bulker carriers than for tankers. More than 60% of the dry cargo ships lost between 2009 and 2013 were bulkers older than 25 years.

Weather continues to be the major cause of the total losses representing almost 50% of the vessels lost in the five-year period. Grounding is the second most frequent cause, accounting for 25% of the cases.

The loss of the MOL Comfort dominated the cargo market, with an expected insured loss of between $300m and $400m.

The disaster highlighted the growing concerns of cargo underwriters given that the MOL Comfort was carrying 4, 382 containers and the market is set to welcome a new breed of container vessel with capacity of up to 24, 000teu.

In the energy market there are signs that the construction boom which began in the mid-2000s is reaching its peak, with the number of rig deliveries set at its highest for 2014, said IUMI.

The worldwide mobile fleet has continued to grow and is at a record number, with utilisation rates increasing sharply in all areas of the world.

In term of rigs, attritional loss activity remains relatively high compared to the 1990s and early 2000s. This appears to be because there is significantly more offshore drilling activity now than in those prior periods.

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