Page 12: of Maritime Reporter Magazine (December 2021)

Insurance Insights

Larger Vessels,

Larger Exposures

Boskalis

By Captain Rahul Khanna, Global Head of Marine Risk Consulting at

Allianz Global Corporate & Specialty he blocking of the Suez Canal by one of the largest tinue with climate change and the introduction of greenhouse container ships in service in the world – the Ever Giv- gas emissions reduction targets for the industry. Despite the en – in March 2021 caused huge delays to hundreds of Covid-19 pandemic, ever larger vessels are on order. In De-

T vessels waiting to transit the canal, one of the biggest cember 2020, Ocean Network Express ordered six new con- chokepoints on the critical East/West trade shipping route. The tainer ships with capacity in excess of 24,000 teu. The HMM blockage was estimated to have affected an estimated $9.6bn of Algeciras, introduced in April 2020, is currently considered goods each day, or around 12% of total world trade. to be the world’s largest container ship with capacity of just

The latest in a growing list of incidents involving large ves- under 24,000 teu.

sels, the Ever Given has added to concerns in the industry While economies of scale have helped drive the trend for that the risks associated with large ships may soon outweighs larger and larger vessels, insurers have been warning about the bene? ts. the growing risks associated with larger vessels for years, in-

The industry needs to look more closely at how to minimize cluding the problem of ? res on large container ships. Insurers the risks of mega-ships, especially in ports or in bottleneck have already seen a number of very large claims from ? res passages like the Suez Canal or the Panama Canal, given the and groundings for large container ships as well as ? re and disruption we have seen that grounding incidents can cause. stability issues for car carriers. Large ore carriers have also

If a ship runs aground in one of these waterways, specialized seen losses while the grounding of the cruise ship Costa Con- tugs would be needed and the port and canals should have ac- cordia remains one of the most expensive marine insurance cess to adequate resources in relatively short time. losses in modern times at almost $2bn.

More recently, the industry is seeing the biggest spike in

Economies of Scale Alongside Greater Risks lost containers at sea in seven years. Large claims from con-

Container ships, car carriers and bulk carriers have grown tainer ship ? res and groundings, as well as the loss of thou- larger in recent decades as shipping companies seek econo- sands of containers at sea, all have one common thread – the mies of scale and fuel ef? ciency, a trend that is likely to con- increasing size of vessels.

12 Maritime Reporter & Engineering News • December 2021

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