Insurers: The sinking of Costa Concordia is the biggest loss in 2012.

Twelve months after the accident of the passenger ship Costa Concordia, a new Allianz report reveals the figure of 106 ships lost worldwide during 2012.

This represents an increase of 15 lost ships compared to the previous year when 91 losses were recorded, but also a decrease of 27 percent compared to the ten-year average of 146 ships per year. Thanks to technology, education, regulation, and proactive actions by the shipping industry, the downward trend has been ongoing for some time, but human error remains a fundamental challenge.

In terms of safety in the shipping industry, 2012 was marked by two high-profile accidents with multiple fatalities: the loss of the Costa Concordia in Italian waters on January 13, which had 127 Croatian citizens on board, marking the largest loss of the year, and the sinking of the Rabaul Queen ferry near Papua New Guinea on February 2, 2012, as noted in the annual report on maritime losses ‘Safety and Shipping’ in which the marine insurer Allianz Global Corporate & Specialty (AGCS) provides an overview of the most significant events.

According to the aforementioned report, sinking was the most common cause of losses recorded last year, accounting for 49 percent. This was followed by shipwrecks and groundings at 22 percent, while collisions, such as that of the Baltic Ace and Corvus J ships in early December last year, accounted for a relatively small number of losses (6 percent). In the waters around Japan, Korea, and northern China, 10 accidents were recorded. In the eastern Mediterranean and the Black Sea, 15 accidents were noted, while twice as many maritime accidents, as many as 30, occurred in the waters around southern China, Indochina, Indonesia, and the Philippines.

Human error – the main cause of accidents
The report highlights that human error remains the main cause of most of the aforementioned accidents. Fatigue, economic pressures, and insufficient training are reasons for concern. Dr. Sven Gerhard from AGCS stated: “Some owners of commercial vessels, especially those in troubled sectors of cargo ships and tankers, have extremely little money for vessel maintenance and training.”

New regulations, therefore, address the issue of human error. The Maritime Labour Convention, which will come into force this year, will help improve safety by addressing issues of welfare and working conditions for seafarers. Generally speaking, passenger vessels were at the center of interest throughout the year. Both the International Maritime Organization (IMO) and the cruise industry have taken a series of steps to tighten regulations and continue improving operational procedures and practices.

Self-regulation on the bridge

Following the accident of the Costa Concordia passenger ship, major shipping companies launched a series of self-regulatory initiatives. For example, the Cruise Lines International Association (CLIA) and the European Cruise Council (ECC) have joined forces and are leading an industry-wide initiative for the voluntary adoption of policies that cover a broader area than that covered by international regulatory requirements. The adoption of the concept of the command bridge based on individual duties is also becoming more widespread. In this case, the structure of the command bridge changes, and the traditional role of the ship’s captain as the main commander gives way to mutual control and coordination. “Such self-regulation represents a fundamental driver of safety in this industry,” emphasizes Gerhard, who believes that such concepts will soon be applied in other sectors where passenger safety is paramount.

In addition, a series of technological improvements, such as the introduction of the mandatory ECDIS standard (Electronic Chart Display and Information System) in July last year, is expected to reduce the number of accidents, but only in places where they are properly implemented, along with effective training and supervision of superiors. “Technology is only as useful as the education behind it, and we often do not see that human element that goes hand in hand with other improvements. What we see with the best ship operators is a proactive culture of managing safety aspects that goes beyond the minimum standards and flows from the top to the bottom of the organization. Such an approach truly impacts safety improvement,” believes Gerhard.

AGCS is one of the world’s leading marine insurers, providing services for all types of modern shipping, including tankers, bulk carriers, container ships, and passenger vessels, as well as yachts and recreational craft. Additionally, AGCS provides cargo insurance and covers physical losses or damage suffered by international and domestic goods in transit. In 2011, AGCS’s marine business generated over 940 million euros in insurance premiums (based on gross premiums written).