Ocean hull claims costs remained elevated in 2024–2025, with the claim cost per vessel 33% above both pre-pandemic and 2021 levels. The rise is driven by costly machinery failures, fires, inflation, and an ageing fleet. Inflation impact is illustrated by various indicators.
Key highlights:
From a silver tsunami to a claim’s tsunami?
- Machinery failure and fires drive increase in claim cost
- Extraordinary increase in claims above USD 10 million
- 3rd consecutive year with claims above USD 50 million
- Still a burning issue – Fires continue to dominate major losses
- Total losses: Increase for vessels with higher values
- Big increase in the cost of medium sized claims
Fleet features
- The silver tsunami rolls on – Ageing of fleet continues
- Vessel values: stable in 2025 renewals but differs by type
- Battery propulsion: highest share on passenger and fishing vessels
Fires continue to impact costs
Fires only rarely exceeded USD 10 million and none USD 30 million in the years 2016 to 2018. This changed from 2019. Since then, particularly the number of severe fires on container vessels but also car/RoRo vessels increased. The marine industry, including marine insurers, got increasingly concerned by an escalating number of fires on container vessels, especially in the cargo area and the engine room.
After a slightly reduced impact in 2022, the following years again saw a resurgence of severe fires. In 2023, the two largest losses above USD 50 million were fires, and four out of nine losses above USD 10 million were fire-related. This compares to seven fires out of eighteen losses above USD 10 million in 2024. In 2025, seven of the thirteen reported losses above USD 10 million were fires, with four representing the costliest losses of the year.
At the same time, the cost of nautical-related claims (collision, contact, grounding), which had remained relatively stable since 2014, has begun to increase. In 2024, the two largest losses above USD 30 million were both collisions. The average cost of machinery claims has also trended upward in recent years, though it now appears to be stabilizing at an elevated level.
Importantly, some of the costliest claims—such as collisions, contacts, and groundings—may be triggered by underlying machinery or steering gear failures.
A notable example is the machinery blackout that caused the container vessel Dali to strike the Baltimore Bridge. In some cases, such incidents are classified as machinery claims, while in others they are not. Similarly, many fires originate in the engine room, and some heavy weather claims are triggered by machinery blackouts.
As a result, the total cost of claims fully or partially driven by machinery and equipment malfunction is higher than what is captured in the ‘machinery claims’ category alone.
In 2025, nine machinery claims above USD 5 million were reported, compared to fourteen in 2024, eight in 2023, and ten in 2022. Most of these claims involve damage to the main engine, followed by the auxiliary engine and propeller shaft.
Underlying these trends are structural pressures such as an ageing fleet and crewing challenges, reflected in the increasing share of inspected ships being detained in recent years. Major losses have also accelerated, with the number of claims above USD 10 million doubling from nine in 2023 to eighteen in 2024.
Notably, half of the 2024 claims only developed into that range in 2025, whereas major loss costs are typically assessed more quickly. This pattern continues into 2025, with thirteen such claims already reported by year-end.
Furthermore, 2025 marks the third consecutive year with losses above USD 50 million. While large claims are subject to natural volatility, claims below USD 5 million are also showing a persistent and material increase, reaching levels previously seen only in 2006–2008.
Bottom line: the claims environment is costlier and increasingly machinery- and fire-driven calling for loss prevention, focus on manning, regulatory action on fire safety, and focus on reserving under inflationary pressure.