Global shipping losses drop to record low of 27 vessels, but new geopolitical risks loom: Allianz

Photo: Marinha Portuguesa

Global shipping losses have fallen to their lowest level in decades—just 27 vessels in 2024, down from more than 200 annually in the 1990s—according to the Safety and Shipping Review 2025 by Allianz Commercial, the corporate insurance division of Allianz Group.

Despite the improvement in maritime safety, Allianz warns the industry is entering a new phase of risk, shaped by escalating geopolitical tensions, shifting trade policies, and rising incidents involving fire and misdeclared cargo.

The shipping sector is being tested on multiple fronts, including sanctions, vessel seizures, attacks on commercial ships, and the fallout from damaged undersea cables that are vital for global data transmission.

These risks come at a time when the sector is still dealing with the effects of the Covid-19 pandemic and adjusting to the energy transition. With 90% of global trade moving by sea, disruptions to the shipping network have far-reaching consequences, especially as traditional hazards like fires, groundings, and collisions continue to cause major losses.

Trade relations between the US and China remain volatile, with tariffs reaching as high as 145% before a temporary 90-day reduction was announced. As of April 2025, about 18% of global maritime trade is affected by tariffs—up from just 4% in early March—leading to significant declines in shipping volumes in response to policy shifts.

At the same time, the rise of the so-called shadow fleet has become a serious concern for insurers and regulators. These tankers, often operating without clear ownership or compliance with international norms, have expanded significantly since the war in Ukraine began.

Approximately 17% of the world’s tanker fleet—nearly 600 ships—is now believed to be part of this unofficial network, primarily transporting sanctioned Russian oil. The shadow fleet has been linked to dozens of accidents, including fires, collisions, and oil spills.

Fires remain a top threat in marine insurance. In 2024, there were 250 reported fire incidents across all vessel types—a decade high. Container ships, ro-ro vessels, and cargo ships accounted for about 30% of these. Over the past ten years, more than 100 vessels have been lost due to fires, often traced to improperly declared or hazardous cargo.

The growing global demand for lithium-ion batteries and energy storage systems—driven by electrification—adds to the complexity, increasing the risk of thermal runaway events during transport. Regulatory changes and new detection technologies are being introduced to address the issue, but implementation and enforcement remain uneven.

Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial, said: “The relevance of political risk and conflict as a potential cause of maritime loss is increasing with heightened geopolitical tensions.

Total losses from traditional causes may have reduced over time, but we could be in a position where this positive trend is potentially offset by war and other political-related exposures. As an industry, we are in a better position with regards to traditional risks, but there is a renewed focus on geopolitical risks.”

Khanna added: “There is little doubt the shipping industry is becoming more resilient against the risks associated with large vessels, although we can by no means say they are under control. However, only 27 total losses during 2024 underlines the positive trend.

“To put this into perspective: there are over 100,000 ships (100GT+) in the global fleet. However, uncertainty and multiple risks persist. Cyber-attacks and GPS interferences are increasing. Ceasefires have raised hopes, but the Red Sea security threat and supply chain disruption will likely remain. Meanwhile, the green transition requires much work. The coming years will be decisive and will determine the path of the sector and global trade.”

“Although recent sanctions are making it harder for these vessels to trade, the shadow fleet continues to pose a serious risk to maritime safety and the environment, as many are likely to be older vessels that are poorly maintained and inadequately insured. In case of an oil spill involving a shadow fleet tanker, cleanup costs could be as much as US$1.6bn,” added Justus Heinrich, Global Product Leader, Marine Hull, Allianz Commercial.

Source: reinsurancene.ws