Allianz Commercial has warned of a changing risk profile for the shipping industry despite the number of vessels lost worldwide hitting a record low.

The insurer’s latest Safety and Shipping Review says 26 large vessels were lost last year, a 33% drop from the previous year, continuing a decade-long downward trend. 

Waters around south China, mainland southeast Asia, Indonesia and the Philippines were hotspots, with nearly one-third of reported losses in that region last year.

The total number of shipping incidents fell below 3000 for the year. 

While acknowledging the downward trend, Allianz says recent geopolitical conflicts have brought “unprecedented” risks to the industry.  

“Conflicts such as in Gaza and Ukraine are reshaping global shipping, impacting crew and vessel safety, supply chains and infrastructure, and even the environment,” Allianz Commercial global head of marine risk consulting Captain Rahul Khanna said.

“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, decarbonisation.”  

Allianz says attacks on vessels in the Red Sea are a leading cause of concern, with a 40% drop in transits across the Suez Canal.

The attacks have meant more vessels are making the longer and more carbon-costly journey around South Africa’s Cape of Good Hope, which has had a 193% uptick in shipping volume.  

The insurer says the longer journey also presents an increased risk of incidents from storms and rough seas, with less developed shipping infrastructure nearby to help vessels in trouble.

Machinery damage or failure accounted for more than half of shipping incidents last year.

Allianz Commercial marine hull global product leader Justus Heinrich says the industry needs to improve shipping infrastructure while ensuring it is adaptable to modern ships.  

“Capacity constraints on shipyards could have a knock-on effect for repairs and maintenance, with damaged vessels or those with machinery issues potentially facing long delays,” he said. 

“Increasing shipyard capacity will also be key as the demand for green ships accelerates. Such capacity is currently constrained with long waiting times and high building prices.”