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Russia-Ukraine conflict increases maritime risks: Alliance



Despite a decline in losses last year, the shipping industry is facing rising risks from the Ukraine conflict, according to a report published on Tuesday by Allianz Global Corporate & Specialty SE.

The war in Ukraine has affected shipping on several fronts with losses of lives and ships in the Black Sea, disruptions in trade with Russia and Ukraine and the growing burden of sanctions, says AGCS, a unit within Allianz SE, in the report.

Insurance companies are likely to see a number of claims under naval war policies from ships damaged or lost to naval mines, rocket attacks and bombings in the Black Sea and the Azov Sea, the AGCS said.

Insurance companies can also see claims from ships and cargo blocked or trapped in Ukrainian ports and coastal waters by the Russian blockade, according to the report.

The potential for non-war losses that could develop for ships captured in the conflict captured in Ukrainian ports and the Black Sea is likely to create uncertainty.

Claims that arise under hull and cargo policies that are not directly related to the war can be difficult to resolve, AGCS said. Sanctions can prohibit some, but not all, of an insurance claim, for example.

Security agencies have also warned of increased cyber-risk due to the Ukraine conflict, warning Black Sea ships of threats from GPS disruption, automatic identification systems, communication disruption and electronic disruption, the AGCS said.

“Transmission assets and ports could be sidelined if the conflict in Ukraine results in increased cyber activity,”

; said Captain Rahul Khanna, Global Director of Marine Risk Consultation at the AGCS, in an interview with Business insurance.

The war creates an extra burden for a shipping industry that is already dealing with ongoing disruptions in the supply chain, congestion in ports and a crew crisis caused by the pandemic, said Captain Khanna.

Approximately 54 total ship losses were reported globally in 2021, a decrease from 65 the previous year. Cargo ships accounted for half of the lost ships (27), with the founding being the most common cause of the loss, the AGCS said.

However, the number of reported maritime accidents or incidents increased to 3,000 in 2021, up from 2,695 by 2020. Machine damage / breakdown accounted for more than a third of these incidents globally, according to the report.

The overall improvement in total losses reflects the industry’s ongoing positive safety trend, with annual freight losses declining by 57% over the past decade, the AGCS said.


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