Shipping losses hit historic low amid rising risks: Allianz review

In 2023, the global count of large ships lost dropped significantly to 26, down over a third from the previous year’s total of 41. Over the past decade, annual shipping losses have plummeted by 70%. Particularly notable is the South China, Indochina, Indonesia, and the Philippines maritime region, accounting for nearly a third of the vessels lost in 2023.

However, the review warns that risks persist despite this decline. Geopolitical conflicts pose a significant threat, with over 100 ships targeted in the Red Sea by Houthi militants alone. Disruptions to shipping in and around the region are ongoing, accompanied by a resurgence of Somali piracy.

As a consequence of these attacks, observed also in Middle Eastern waters, vessels reroute, leading to extended detours and higher costs. This may compromise environmental gains as ships accelerate to cover longer distances. Moreover, rerouting impacts both the risk landscape and the environment. Storms and rough seas pose greater challenges for smaller vessels accustomed to coastal waters, while infrastructure support for incidents involving large vessels may be insufficient.

Extreme weather contributed to at least 8 vessel losses worldwide in 2023, with the final figure likely higher.

Captain Rahul Khanna, Global Head of Marine Risk Consulting at Allianz Commercial, remarks, “The speed and extent of the way the industry’s risk profile is changing is unprecedented in modern times. Conflicts such as in Gaza and Ukraine are reshaping global shipping, impacting crew and vessel safety, supply chains and infrastructure, and even the environment. Piracy is on the rise, with a worrying re-emergence off the Horn of Africa. The ongoing disruption caused by drought in the Panama Canal shows how the changing climate is affecting shipping, all at a time when it is having to undertake its most significant challenge, decarbonization.”