Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • March 2015
03

Shipping losses decline but cyber risk is a growing concern in the sector

Open-access content Friday 27th March 2015 — updated 5.13pm, Wednesday 29th April 2020

Shipping losses worldwide have declined by 50% over the past decade, but 75 ships were lost in 2014, according to study.

2

A report published by Allianz Global Corporate & Specialty (AGCS) found more than a third of 2014's total losses took place in two maritime regions: South China, Indo China, Indonesia and the Philippines, with 17 ships lost; and Japan, Korea and North China, with 12 ships lost.

It said the British Isles, North Sea, English Channel and Bay of Biscay had seen the most shipping incidents since 2005, with nearly one in five (18%) of all incidents occurring in this region. Such incidents include machinery damage and hull damage.

The report Safety and Shipping Review 2015 said despite the decline, cyber risks were a growing concern in the shipping sector, while the increasing size of container ships meant potential losses exceeded $1bn (£670m). 

The firm said although the number of known cyber crime incidents was low, more than 90% of global trade was estimated to be carried by sea, so "much is at stake, with an increasing number of potential loss scenarios". Such scenarios included cyber criminals targeting a major port, closing terminals, or interfering with containers or confidential data. 

Captain Rahul Khanna, global head of marine risk consulting at AGCS, said: "Cyber risk may be in its infancy in the sector today, but ships and ports could become enticing targets for hackers in future. Companies must simulate potential scenarios and identify appropriate mitigation strategies."

The report said cargo-carrying capacity in container ships increased by approximately 1,200% over the past 50 years and by more than 80% during the past decade alone.

The firm explained bigger ships could lead to bigger losses and warned of risks such as limited operation of large ships in a small number of deep water ports, a worldwide shortage of qualified seamen to operate such ships and difficulty of salvage.

Sven Gerhard, global product leader of hull and marine liabilities at AGCS, said:  "Larger ships can also mean larger losses. The industry should prepare for a loss exceeding $1bn in future featuring a container vessel or even a specialised floating offshore facility."

Khanna said the shipping industry "should think long and hard before making the leap to the next ship size".

Movement of cargo on ships was a concern mentioned in the report following the incident of car transporter Hoegh Osaka, carrying 1,400 cars including more than £1m worth of BMW Minis, which was deliberately grounded in the Solent due to listing in January 2015. The issue first became a focus following the capsizing of the car ferry Herald of Free Enterprise in March 1987.

According to the report, the most common cause for ship losses was foundering (ship sinking), with 65% (49 ships) of losses in 2014, followed by grounding, with 13 ships wrecked or stranded, and fire/explosion, with four ships lost.

This article appeared in our March 2015 issue of The Actuary .
Click here to view this issue

You may also be interested in...

ta

'Major risks' to current flood protection levels, say MPs

There are major risks to the sustainability of current levels of flood protection, which could impact on long-term value for money, according to the Public Affairs Committee (PAC).
Wednesday 25th March 2015
Open-access content
2

Falling oil prices create instability in emerging markets

Falling oil prices have global implications for political risk in emerging markets.
Wednesday 11th March 2015
Open-access content
2

New joint initiative created to tackle the 'growing threat of cyber risk'

The Cabinet Office (CO) and an insurance broking and risk management firm have joined forces to help businesses tackle cyber risk.
Monday 23rd March 2015
Open-access content
ta

Economic losses from natural disasters cost around $240bn per year

Preliminary results of a catastrophe modeling study show economic losses from major natural disasters over the past 20 years oscillate around a baseline value of $240bn.
Thursday 19th March 2015
Open-access content
2

Dependency on financial models posing risk, say asset managers

Less than a fifth of asset management professionals believe the financial services industry is effective at managing model risks, according to research.
Friday 6th March 2015
Open-access content
2

Reporting templates and calculation made simpler under Solvency II, says PRA

Under the final rules implementing the Solvency II directive, the Prudential Regulation Authority (PRA) has simplified matters in two areas.
Thursday 26th March 2015
Open-access content

Latest from Risk & ERM

KV

Liability-driven investments: new landscape

What now for liability-driven investments, after last year’s crash in the market? Pensions experts Rakesh Girdharlal and Moiz Khan say it should lead to a more balanced approach
Wednesday 1st February 2023
Open-access content
cj

Natural capital investing

Chris Howells and Andrew Dreaneen discuss how today’s investments in natural capital profit portfolios as well as the planet and humanity
Wednesday 1st February 2023
Open-access content
bl

'Takaful' models of Islamic insurance

Ethical, varied and a growing market – ‘takaful’ Islamic insurance is worth knowing about, wherever you’re from and whatever your beliefs, says Ali Asghar Bhuriwala
Wednesday 1st February 2023
Open-access content

Latest from March 2015

2

Have your say: Council elections

The future of the profession depends on you – and, crucially, your vote, writes Derek Cribb
Tuesday 31st March 2015
Open-access content

Small firms want list of pension providers to avoid non-compliance

Nearly two thirds (61%) of firms with up to 250 staff would like a list of recommended pension providers that accept smaller companies, research has found.
Tuesday 31st March 2015
Open-access content

Nick Mann: A consummate professional and charming presence

The Actuary team was shocked and saddened to learn of the tragic death of our former colleague Nick Mann in an accident on London Underground at the weekend.
Tuesday 31st March 2015
Open-access content

Latest from small_opening_image

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from 03

Small firms want list of pension providers to avoid non-compliance

Nearly two thirds (61%) of firms with up to 250 staff would like a list of recommended pension providers that accept smaller companies, research has found.
Tuesday 31st March 2015
Open-access content

Nick Mann: A consummate professional and charming presence

The Actuary team was shocked and saddened to learn of the tragic death of our former colleague Nick Mann in an accident on London Underground at the weekend.
Tuesday 31st March 2015
Open-access content

City Noble calls for ban on DB to DC pension scheme transfers

A pensions advisory firm has called on the government to prohibit defined benefit (DB) to defined contribution (DC) pension scheme transfers.
Monday 30th March 2015
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

BPA Transition Manager

London, England / Edinburgh, Scotland
£45000 - £65000 per annum + market leading bonus and benefits
Reference
148878

London Market Pricing Contracts - Inside & Outside IR35

London (Central)
£1000 - £1300 per day
Reference
148877

SME Pricing Director

London (Central), London (Greater)
£225K + bonus + benefits
Reference
148872
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ