Global claims trend in marine insurance is all-time high this year. Compared to the past decade, the total losses in maritime accidents have shown an increase of more than 50%. Fire and explosion incidents have taken the top spot when it comes to marine losses, as compared to other incidents such as sinking, collision, etc. in a marine insurance policy. Here are a few key factors that are responsible for the global claims trend in Marine Insurance.
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Fire and explosion incidents are highly common and undoubtedly the most expensive claims in a marine insurance policy. According to the report of Allianz Global Corporate & Specialty (AGCS), in November 2022, 240,000 claims for marine insurance policies arose worldwide in the span of four years, i.e., from January 2017 to December 2021. Out of the total claims, more than 18% of the claims solely belonged to the ‘fire and explosion incident’ category. Earlier, fire incidents accounted for 13%, however, currently, it has increased by 5% in marine insurance policy claims.
Climate risk is another factor for increasing global claims trend in marine insurance. The bad weather conditions have contributed to a total loss of 25% more than the losses reported in 2021. The drought in Europe again disrupted the shipping process compelling many vessels to navigate to other locations.
Due to the bad weather, various containers were lost at sea. The number of lost containers increased as of 2021. A total of 1629 cases of lost containers were reported which led to rising in marine insurance policy claims.
The Major countries of the world are moving towards sustainable development and putting significant efforts towards de-carbonizing the major industries, including the shipping industry. However, the shipping industry is a significant contributor to Global Greenhouse Gas (GGG) emissions.
This sustainable approach, due to its expensive nature, which includes introducing costs to reduce the risk of operating such as machinery breakdown, investment in propulsion and vessel research and implementing the usage of alternative fuels may lead to higher expenses for the shipping industry by adding to the cost of doing business.
With the advent of low-sulfur fuel oil, insurance companies have encountered various machinery breakdowns and contaminated fuel claims. Machinery breakdown has become the primary cause of marine insurance policy claims.
In recent years, shipping industries have caused significant losses due to major delays in shipping. Furthermore, due to Covid-19, the sector faced shortages of labour, leading to more failures and delays in operations.
The Russia-Ukraine war, which commenced in the year 2014 and escalated in the year 2022, ultimatelyleading to Russia's invasion of Ukraine, is undoubtedly a significant factor in the global claims trends in marine insurance. The marine policy claims have seen a spontaneous rise as the shipping industry suffered a lot due to the war. The sector has reported approx $1 billion in losses due to the war.
Fire, climate change, war, etc., are some of the major global claims trends in marine insurance, contributing a large portion of marine insurance policy claims. In addition, the suggestions (net-zero emission) made by many influential leaders of the world are yet to show some concrete results. This is also a cause of the increase in claims. The suggestion of net-zero emission has also contributed to marine insurance policy claims in the recent few years.
Written By: PolicyBazaar - Updated: 03 May 2023
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4.3 February 11, 2023
I appreciate the transparency and honesty with which Policybazaar handled my claims. They were prompt in processing my claim and their claim settlement process was hassle-free.Thanks PolicyBazaar.
3.8 February 10, 2023
I recently had the pleasure of purchsing marine insurance from Policy bazaar website and I must say it has been an outstnding experience from start to finish. I am thrilled to share my positive customer review, as this truly exceeded my expectations. Thanks PB.
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4.3 January 11, 2023
When it came to claims processing, Policy bazaar demonstrated remarkable eficiency and effectivenes. I had an unfortunate incident during the coverage period and filing a claim was a breeze. The entire process was streamlined and their team guided me throuugh every necssary step, making it hassle-free. The promptness with which my claim was setled reflected their commitment to their customers' well-being and peace of mind. Thankyou.
3.8 January 01, 2023
I must mention the comprehensive coverage provided by the marine insurance policy I purchasd through Policy bazaar. It offered me the necesary protection and peace of mind. Thankyou PolicyBazaar.
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