MARINE INSURANCE | Major casualties at sea increase

Major casualties at sea have continued at a disturbing level, marine insurers warned.The number of incidents reported in 2010 followed the negative trend of the previous four years, the International Union of Marine Insurance (IUMI) reported in its annual statistics, which cover vessels over 500 gt.

There have been 623 serious losses reported to date for 2010, a similar figure to 2009. This meant that 2010 joined the five worst vessel loss years out of the last 17.

The pattern seems to dash hopes raised a year ago of a reversal in casualty experience when shipping activity had slowed as a result of recession in many leading nations.

Patrizia Kern (a senior underwriting director at Swiss Re), chair of the facts and figures committee, one of IUMI’s seven technical committees, said that even ahead of a full picture of the year from claims reports, there was no doubt that the failure to stem the high level of casualties was of great concern to insurers.

“When IUMI’s annual conference is held in September, our committee will undoubtedly report higher 2010 figures for total losses and serious losses, illustrating the longtail nature of hull and machinery claims,” she said.

The number of total losses for 2010 stands at 63, similar to the figure reported for 2009.

Since last year’s report, the outcomes for 2008 and 2009 have deteriorated. The number of reported total losses in 2008 has increased from 89 to 96 and for 2009 from 67 to 86.

This would suggest that 2010 will be similar to its preceding two years. At this early stage of development of the book, nearly 600,000 gt has already been reported as lost in 2010, against nearly 645,000 gt in 2009. Weather continues to be the major cause of total losses, followed by groundings.

The number of drybulkers and tankers, which suffered total losses continues to be low relative to the world fleet, but there appears to be a trend of losses to larger vessels.

For tankers, the average losses rose from 8,000 gt to 11,000 gt and then to 36,000 gt in 2010, IUMI said.

Worryingly, the number of major incidents remains consistent with the trend over the previous four years, and the back year figures continue to deteriorate.

The leading cause of serious or partial losses remains as incidents involving the machinery and engine room, accounting for 35.7% of cases over the last five years.

Half of all such losses occurred to vessels over 20 years of age.



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