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Triple-I Blog | COVID-19 and freight risk



The shipping industry has largely proven to be resistant to the outbreak of coronavirus, and insurance claims related to marine risks can be reduced when fewer ships venture out, says insurer Allianz in its Safety and Shipping Review 2020.

challenges have emerged as may lead to more claims.

"One of the biggest issues," reports Allianz, "has been the inability to easily change crews due to pandemic restrictions."

Crew relief is important to ensure the safety and health of seafarers. Exhausted crew members make mistakes that Allianz says contribute 75 percent to 96 percent of marine incidents. Damaged goods and containers account for more than one in five freight claims.

"The pandemic has increased the risk environment for high-quality and temperature-sensitive goods, especially when supply chains have been squeezed, cargo handling companies have been shut down suddenly and ports operate under restrictions," says Allianz.

COVID-1

9 has also made it difficult to obtain parts and materials as lubricants that are important for maintenance and repair. This can make ships and equipment on board them less safe, which can lead to wrecks or collisions.

Such an outcome could hinder or reverse the industry's steadily improving safety record.

The number of total losses for large vessels fell in 2019 to 41, Allianz reported – "the lowest total this century and a fall of nearly 70% in 10 years."

The insurer credits improved ship design, technology, regulation and risk management as contributing to the long-term reduction of losses.

But improved technology can be a double-edged sword when ships become more dependent on computers and software, making them vulnerable to cybercrime. The coronavirus outbreak has also affected this risk, says Allianz, and reports that companies have seen a 400% increase in attempts at cyber attacks since the pandemic began.


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