12 March 2024

Shipping fire risk cause of concern for global insurer

An annual review of shipping by multinational insurer Allianz has raised concern about the ongoing risk of hull and cargo fires. The 2023 Allianz Global Corporate & Specialty (AGCS) Safety & Shipping Review specifically singles out decarbonisation and new types of cargo being transported on vessels, including EVs and battery-powered goods.

Fire is one of the most frequent causes of total losses across all vessel types with 64 ships lost in the past five years, and fire is the most expensive cause of marine insurance claims, accounting for 18% of the value of all claims analysed.

Captain Rahul Khanna, Global Head of Marine Risk Consulting at AGCS, says “Most ships lack the suitable protection, detection and firefighting capabilities to tackle such fires at sea. Attention must focus both on pre-emptive measures and emergency plans to help mitigate this peril such as adequate crew training and access to appropriate firefighting equipment or improving early detection systems. Purpose-built vessels for transporting EVs would be advantageous.”

“The debate about electric vehicles in the shipping industry is ongoing, with conversations about whether there is a need for dedicated Ro-ro vessels for EVs. From an insurance perspective, this is something we would like to see – purpose built vessels for transporting electric vehicles, designed to substantially reduce the risk of fire,” Captain Khanna said.

When it comes to concrete actions to mitigate battery fire risk in containers and on Ro-Ros, there is no clear universal solution as yet, says Justus Heinrich, Global Product Leader Marine Hull at AGCS: “If this risk is not properly mitigated, insurers will have to address it through portfolio management methods.”


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