March 13, 2014 / 8:01 AM / 4 years ago

Allianz warns of new insurance risks from super-sized ships

LONDON, March 13 (Reuters) - The rise of super-sized container vessels and the opening up of potentially hazardous routes through once-frozen Arctic waters pose the biggest new challenges to ships and their insurers, a report said.

German insurer Allianz flagged these “emerging risks” in its annual Safety and Shipping report, published on Thursday. The company said increased use of these large cargo ships, such as the Maersk “Triple E class”, which is as long as four football pitches, could lead to potentially massive insurance claims.

“The claims arising out of maritime emergencies of these mega ships can be huge. For example, just think of the business interruption of ports and terminals if an accident was to block the entrance,” Sven Gerhard, Global Product Leader, Hull & Marine Liabilities at Allianz Global Corporate & Specialty, said.

The insurer also pointed to increasing use of greener fuels such as liquefied natural gas to power ships as a potential hazard because of a lack of infrastructure in ports or expertise in handling it.

A third emerging risk were new Arctic trading routes, opened up my melting sea ice.

Shipping casualties in the Arctic have increased to an average of 45 per year during 2009 to 2013, from only seven between 2002 and 2007, Allianz said.

Shipping losses in 2013 were down 20 percent from a year earlier with 94 vessels lost worldwide. Most of these were due to vessels sinking, often on account of bad weather, the insurer said in the report.

On piracy, Allianz said this was declining globally, down 11 percent last year to 264 reported incidents. But the company also said this masked a rapid increase in attacks in specific regions. Last year, there were 106 reported incidents in Indonesia, a 700 percent increase since 2009, Allianz said.

Reporting by Chris Vellacott. Editing by Jane Merriman

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