Allianz Commercial pegs SEA as global hotspot for maritime losses in 2023

This region saw over 184 total losses in the past decade.

The maritime industry is a critical component of global trade, with around 90% of international trade transported by sea, Allianz Commercial said.

Over the past three decades, the sector has seen significant improvements in safety, with the global shipping fleet's loss of large vessels dropping from about 200 per year to a record low of 26 in 2023. This represents a decline of over 70% in the past decade. 

However, maintaining this safety record faces challenges from geopolitical tensions, climate change, and the trend towards larger vessels, as highlighted in Allianz Commercial's Safety and Shipping Review 2024.

Last year, the Southeast Asia region emerged as the global hotspot for maritime losses, with eight vessels lost out of a total of 26 worldwide. 

This region has consistently seen high loss rates, with over 184 total losses reported over the past decade. The primary causes of these losses include foundering (sinking), often exacerbated by extreme weather, which was a factor in at least eight vessel losses globally in 2023.

The speed and complexity of the changes in the maritime industry's risk profile are unprecedented. 

Conflicts, such as those in Gaza and Ukraine, have reshaped global shipping, affecting crew and vessel safety, supply chains, and infrastructure, Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial, said in a media release.

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For example, piracy is again on the rise, particularly off the Horn of Africa, and the Panama Canal's operations have been disrupted by drought conditions, underscoring the impact of climate change on shipping routes.

Geopolitical conflicts pose a significant threat to maritime security. The conflict in Gaza, for instance, has led to attacks on over 100 ships in the Red Sea by Houthi militants, affecting shipping operations and safety in the region. 

Other notable conflicts and risks mentioned in the report were the war in Ukraine and the drop in transits to the Suez Canal, 

The shipping industry, responsible for about 3% of global emissions, is committed to reducing its carbon footprint. 

Achieving these targets requires a combination of improved energy efficiency, alternative fuels, and innovative ship designs. However, this transition poses significant challenges, including the need for infrastructure to support new technologies and fuels, and the safety risks associated with handling alternative fuels. 

The capacity of shipyards to build and retrofit green ships is also a concern, with current capacity constraints potentially leading to delays in repairs and maintenance, further complicating the industry's efforts to reduce emissions and enhance safety.