HANSA 02-2023

SCHIFFFAHRT | SHIPPING
Fire and explosion incidents cause the
most expensive insurance claims in
the marine industry, while at a time of rising
exposures and inflation, cargo damage
is the most frequent cause of loss,
according to the recently published report
of Allianz Global Corporate & Specialty
(AGCS). The marine and cargo insurer
analyzed more than 240,000 marine insurance
industry claims worldwide between
January 2017 and December 2021,
worth approximately 9.2 bn € in value.
»The number of fires on board large
vessels has increased significantly in recent
years, with a string of incidents involving
cargo, which can easily lead to the
total loss of a vessel or environmental
damage,« said
Régis Broudin, Global
Head of Marine Claims at
AGCS.
Fires accounted for 18 %
of the value of marine
claims analyzed (equivalent
to around 1.65 bn €)
compared with 13 % for a
five-year period ending
July 2018. A contributing
factor to this increase of
fire risk on board vessels is often misdeclared/non-declaration
(of) dangerous
cargos, while a recent increase in engine
room fires may reveal some underlying
risk around crew competencies. The potential
dangers that the transportation of
lithium-ion batteries on vessels pose only
add to these concerns, with AGCS having
already seen a number of incidents.
The development is causing more and
more anger and incomprehension in the
insurance industry. For some time now,
there have been various attempts to improve
the safety framework conditions in
shipping. Towards the end of last year, the
TT Club finally made a new push. TT
Club is an independent provider of mutual
insurance and related risk management
services to the international transport
and logistics industry. Founded in
1968, the Club has more than 1,100
Members, spanning container owners
and operators, ports and terminals, and
logistics companies, working across
maritime, road, rail, and air.
In a message to the market, it says »TT
Club is continuing its battle to convince
cargo interests, supply chain professionals
and enforcement agencies that
the responsibility for mitigating container
ship fires is shared by numerous
entities involved from end to end of the
entire global supply chain.« With its estimated
sixty-day average occurrence of
serious fires being maintained by the
»Zim Charleston« fire in August and the
»TSS Pearl« in the Red Sea in early October,
TT urged a more comprehensive
approach to arresting the trend.
»There were significant lessons coming
from the sad incident on the ›MSC Flaminia‹,
which cost the lives of three seafarers,
particularly from the subsequent
legal proceedings that adjudged the
shipper and NVOC responsible for root
cause errors,« said TT’s Peregrine Storrs-
Fox. »Despite the biennial updates to the
IMDG Code, including multiple arising
»We are continuing our battle to convince cargo
interests, supply chain professionals and enforcement
agencies that the responsibility for mitigating container
ship fires is shared by numerous entities involved from
end to end of the entire supply chain«
Statement of TT Club
from this particular incident, the judge’s
assessment that the regulations merely
set the ›baseline‹ for good practice remains
utterly true today.«
According to the TT Club, ensuring
compliance with the latest mandatorily
applicable version of the IMDG Code is
essential as a minimum standard for all
those shipping dangerous goods by sea.
But the liability judgement in the »MSC
Flaminia« case made it clear that regulations
merely set the baseline. »This is an
important statement to which any entity
inclined to rely solely on the letter of the
law when consigning dangerous goods,
would do very well to pay heed,« commented
Storrs-Fox.
TT advocates a comprehensive approach,
striving to bring an understanding
of all the factors contributing to
these fires to everyone involved in the
movement of cargo in containers and
therefore underlining their responsibilities
for safety.
Errors, misunderstandings, misdeclarations
and inadequate packing and
securing are described as lying at the
heart of many significant incidents, both
at sea and in storage facilities.
Movement of
cargo is initiated in the
trading of goods – sellers
and buyers – who instruct
packers and
whoever becomes the
shipper. »They have a
duty of care as much as
the packers, warehouse
operators, forwarders,
logistics companies, carriers
of all modal types,
cargo handlers and terminal operators.
Attention to accurate classification and
declaration are critical to improve certainty
of outcome from end to end. This
requires truth as much as awareness of
regulations and sound safety practices.«
Along with its sister insurer, the UK
P&I Club, TT Club has recently updated
its guideline publication, »Book it Right,
Pack it Tight«. It is intended to provide
key insights for all involved in dangerous
goods’ shipments, including a clear ex-
Top causes of loss by value of claims in marine
© AGCS
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