Latest news with #geopoliticalRisks
Associated Press
27-05-2025
- Business
- Associated Press
Geopolitical tensions lead to increasing risks for shipping sector globally
SINGAPORE - Media OutReach Newswire - 27 May 2025 - The fast-changing geopolitical landscape is creating new risks and challenges for a shipping industry already juggling the energy transition and the legacy of the Covid-19 pandemic, according to Allianz Commercial's Safety and Shipping Review. The industry faces an increasingly volatile and complex operating environment, marked by attacks against shipping, vessel detentions, sanctions, as well as the fall-out from incidents involving damage to critical sub-sea cables. Furthermore, the ripple effect of increasing protectionism and tariffs threatens to remake supply chains and shake up established trade relations. Given 90% of international trade is transported across oceans, those developments are concerning, especially as the industry continues to see the potential for large claims from traditional risks such as fires, collisions and groundings, which are still the main drivers for total losses of large vessels. However, there is also good news. The shipping industry has made significant improvements when it comes to maritime safety in recent years. During the 1990s the global fleet was losing 200+ vessels a year. This total had halved 10 years ago and is now down to a record low of 27 as of the end of 2024 (from 35 in 2023). '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,' says Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. US-China trade conflict and growing shadow fleet bring uncertainty and challenges China has been the biggest target of the protectionist measures of the US administration with tariffs reaching 145%, before both countries agreed to reduce them for 90 days. Developments have significantly impacted global maritime trade with approximately 18% of it subject to tariffs as of mid-April 2025, compared with 4% in early March, and dramatic declines in shipments reported in the immediate aftermath of the 'Liberation Day' announcements. While the future of US trade-focused policies remains uncertain, another phenomenon is posing an increasing challenge for the maritime and insurance industries: the shadow fleet. Since the start of the war in Ukraine, the size of the shadow fleet has grown significantly. Today, around 17% of the world tanker fleet is thought to belong to the shadow fleet: estimates indicate there are close to 600 tankers trading Russian oil alone. Shadow fleet vessels have been involved in tens of incidents around the world including fires, collisions and oil spills. '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,' says Justus Heinrich, Global Product Leader, Marine Hull, Allianz Commercial. Red Sea rerouting: older vessels and riskier routes in addition to higher costs With ongoing geopolitical volatility in the Middle East, many ship operators have rerouted vessels around the Cape of Good Hope, adding time and cost to transits between Asia and Europe. For example, this rerouting adds around $1mn in costs and at least 10 days to a typical transit between China and Europe. According to estimates, cargo volumes in the strait had fallen by two-thirds by September 2024, with rerouting costing the global economy some US$200bn that year. The quality and safety of vessels may also be impacted as a result of this rerouting. 'With container capacity under pressure, some shipowners have gone out to the market to meet supply, purchasing tonnage that is often older and second best. This has helped push up values and seen vessels scheduled for scrap and older tonnage stay in the market longer. The concern is that when called back into service, these vessels may not be in the best state to operate safely on longer sea routes and in rough weather,' says Captain Nitin Chopra, Senior Marine Risk Consultant, Allianz Commercial Asia. Fires and mis-declared cargo remain a top concern for large vessels Large vessel fires are still a major concern for hull and cargo insurers. There were seven total losses reported across all vessel types during 2024, the same number as a year earlier. The number of incidents overall was up year-on-year to a decade high of 250, again across all vessel types. Around 30% of these fire incidents occurred on either container, cargo or roll-on roll-off vessels (ro-ros) (69). More than 100 total losses of vessels have been caused by fires in the past decade. Efforts to mitigate these risks are underway, with regulatory changes and technological advancements aimed at addressing mis-declared cargo, a primary contributor to such fires. This is critical as the electrification of the global economy poses further challenges given the growing number of lithium-ion batteries and battery energy storage systems being transported. '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,' explains Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. Hashtag: #shipping #allianzcommercial The issuer is solely responsible for the content of this announcement. Allianz Commercial Allianz Commercial is the center of expertise and global line of Allianz Group for insuring mid-sized businesses, large enterprises and specialist risks. Among our customers are the world's largest consumer brands, financial institutions and industry players, the global aviation and shipping industry as well as family-owned and medium enterprises which are the backbone of the economy. We also cover unique risks such as offshore wind parks, infrastructure projects or film productions. Powered by the employees, financial strength, and network of the world's #1 insurance brand, we work together to help our customers prepare for what's ahead: They trust us in providing a wide range of traditional and alternative risk transfer solutions, outstanding risk consulting and Multinational services as well as seamless claims handling. Allianz Commercial brings together the large corporate insurance business of Allianz Global Corporate & Specialty (AGCS) and the commercial insurance business of national Allianz Property & Casualty entities serving mid-sized companies. We are present in over 200 countries and territories either through our own teams or the Allianz Group network and partners. In 2024, the integrated business of Allianz Commercial generated around €18 billion in gross premium globally.
Yahoo
22-05-2025
- Business
- Yahoo
Gold Rally Could Be Past Its Peak by Year End: StanChart
Standard Chartered Precious Metal Analyst Suki Cooper discusses the factors that led to the gold rally and its relationship to the inflow of ETFs. "If we start to see tax stimulus measures in the US and we start to see some of the uncertainty around geopolitical risks starting to unwind, we could actually see gold starting to stabilize the elevated levels," Cooper tells Bloomberg Television. Sign in to access your portfolio
CNA
07-05-2025
- Business
- CNA
Exclusive-Nordics and Estonia plan offline card payment back-up if internet cut
HELSINKI : Finland, Sweden, Norway, Denmark and Estonia are planning to roll out a system of offline card payments to provide a back-up if internet connections are lost, including due to sabotage, Bank of Finland board member Tuomas Valimaki said on Wednesday. The plan comes after the Baltic Sea region has suffered several instances of unexplained damage to critical undersea infrastructure in recent years, and as Western intelligence services have accused Russia of committing various acts of sabotage - a charge the Kremlin rejects. "The likelihood of major disruptions has increased because the geopolitical situation has changed worldwide. There is a war in Europe, and around that war, there is all sorts of hybrid influence and harassment, which may involve disrupting or cutting connections," Valimaki told Reuters, referring to Russia's invasion of Ukraine. He said payments were a potential target because of their critical role in everyday life. Only 10 per cent of people use cash as their primary payment method in Finland, central bank data show, making the country highly dependent on card payments. "Since card payments require functioning international data links, Finland must be prepared for interruptions. Many other countries are of course in the same situation," Valimaki said, adding Norway, Sweden, Denmark and Estonia were also planning to introduce offline card payments, and possibly other nations too. Valimaki said the plans were still being developed, but offline payments can involve using terminals that encrypt and store transaction data until an internet connection can be restored. Sweden's central bank told Reuters that it hoped to establish a system by July 1, 2026, that would allow Swedes to make offline card payments to buy essential goods in the event of disruptions lasting up to seven days. The central banks of Norway, Denmark and Estonia did not immediately respond to requests for comment. Last year, the Nordic region's largest bank, Nordea, was hit by an unprecedented denial of service campaign that lasted for weeks and at times prevented customers from accessing their accounts online. All of Europe should reduce its dependence on card payments, which are currently heavily reliant on U.S. companies Visa and Mastercard, Valimaki said. To provide an alternative, Finland will introduce a national system for instant payments in a few years, while offline payments will become possible for consumers next year, he said. "We may feel like we have options, to pay with debit or credit or with Apple Pay for example, but all of those function via the Visa and Mastercard infrastructure," he said, calling for diversification. The European Central Bank is planning to introduce a digital euro, which would enable instant payments, but Valimaki said it would take years to establish the system even if it secured the political backing it needs from all euro zone countries. In another push to protect financial security, Finland is also introducing a national system of reserve bank accounts. Under the system, the National Financial Stability Authority would be able to give Finns access to their savings even if their bank was unable to operate, Valimaki said.
