The latest figures from the International Union of Marine Insurance’s (IUMI) Facts and Figures committee show marine hull total losses involving vessels over 500 gross tonnes dropped to just 0.13% of the overall fleet in 2013, down from 0.18% in the previous year.
These numbers are even more impressive when looking at them in terms of tonnage, with total losses affecting just 0.05%, a marked improvement on the 0.1% seen last year.
Weather is again the biggest factor behind total losses, accounting for more than half the casualties suffered between 2009 and last year. Grounding is the second biggest cause, IUMI noted, representing a quarter of all losses.
When it comes to major losses which do not end in a total loss, 35% emanate from machinery claims, although navigational issues – which include groundings and collisions – are responsible for 50% of the claims incurred by insurers.
As in the past, age appears to have a significant bearing on what vessels succumb to difficulties, with 35% of total and major losses affecting those assets over 25 years old.
While underwriters will welcome the new figures which show total losses are on the decline, the scale of some of the claims that have been incurred by the market in recent years shows little sign of abating.
The Costa Concordia continues to dominate the marine market, with those underwriters on the International Group’s excess of loss reinsurance contract for the 2012 year of account still fully aware the ultimate loss remains unknown. They have already been hit by more than $1bn of claims from the International Group policy on top of the $505m claim emanating from the physical loss of the vessel itself.
That was followed by another major claim last year – that of the MOL Comfort which split in two in the middle of the Indian Ocean. The loss of the vessel itself cost underwriters around $100m, but it was the 4,382 containers on board that have really hurt with insurers expected to add at least another $300m on top of this.
As a result, while total losses are reducing, the exposure to major claims remains as real as ever.