Top Business Risks for Marine and Shipping in 2025

Cyber incidents such as data breaches, ransomware attacks, and IT disruptions are the biggest business risks for companies globally in 2025, according to the Allianz Risk Barometer. Business interruption ranks as the second top concern for companies of all sizes followed by natural catastrophes. Now in its 14^th year, the Risk Barometer is an annual business risk ranking incorporating the views of 3,778 risk management experts in 106 countries and territories including CEOs, risk managers, brokers and insurance experts. The Risk Barometer also surveyed Marine and Shipping risk experts to identify the threats keeping them up at night. Here is a look at the top Marine industry risks for 2025:

Natural Catastrophes

Tied for first place by Marine and Shipping respondents are Natural Catastrophes and Political Risks, both at 29 percent.

Natural catastrophes include storms, floods, wildfires, and other extreme weather events. Twenty-nine percent of industry respondents cited this as their top concern for 2025, up from the #2 spot last year.

An above-average hurricane season that featured events like Helene and Milton in the US, Storm Boris in Europe, widespread flooding in several countries and the Noto Peninsula Earthquake in Japan serve as reminders that natural catastrophes are a major threat for companies around the world and the insurance industry.

Natural catastrophes were the fifth biggest cause of marine insurance claims, by frequency and severity over a five-year period analyzed by Allianz Commercial. Extreme weather and natural hazards have contributed to a number of large losses in the past, with the loss of vessels and damage to cargos. Extreme weather was a contributing factor in around a third of the total vessel losses reported in 2023 alone, while drought in Europe and the Americas has caused major disruption to shipping and supply chains in recent years.

Political Risks and Violence

While political risks and violence, which includes political instability, war, terrorism, coup d'état, civil unrest, strikes, riots, and looting, declined in the overall global rankings, it ties with Nat Cats as the top 2025 concern for the Maritime industry, rising from the third spot last year.

Recent incidents, such as in the wake of the conflict in Gaza, have demonstrated the increasing vulnerability of global shipping to proxy wars, disputes and geopolitical events, with many ships having been targeted in the Red Sea and elsewhere by Houthi militants in response to the conflict. Disruption to shipping in and around the region has persisted. Both the war in Ukraine and the Red Sea attacks have also revealed the increasing threat to commercial shipping posed by new technology, such as drones, which are relatively cheap and easy to make, and difficult to defend against without a large naval presence. Looking to the future, more technologically driven attacks against shipping and ports are also a distinct possibility. Reports of vessels experiencing GPS interference have also increased particularly in the Strait of Hormuz, the Mediterranean, and the Black Sea.

Theft

A new entry to the Marine risk rankings is theft, fraud and corruption with 26% of industry respondents ranking this a top concern in 2025. Allianz Commercial has seen an uptick in cargo theft incidents in recent years, particularly in transportation and logistics. In North America, the number of theft claims has increased in recent years, with a 20% increase reported in 2022.

The current economic environment, and cost of living crisis, means there is a much greater incentive to steal. While theft of high value cargo has increased, more and more goods are becoming attractive to criminals that were not before, such as food and household goods.

At the same time criminals are using more organized methods to gain access to cargo, often employing technology. For example, thieves exploit cyber security weaknesses to impersonate a trusted supplier or gain access to systems to facilitate theft or divert shipments. Criminals may also use jammers to interfere with cargo GPS tracking devices and mobile telephone signals, making it harder to recover stolen goods.

Climate Change

Another major risk for the Marine sector is Climate Change, including physical, operational and financial risks as a result of global warming. 2024 was another year of extreme weather and new climate records. Last year is expected to be the hottest year on record. It was also the fifth year in a row in which insured losses from natural disasters worldwide exceeded the US$100bn mark. It is little surprise then that climate change delivers a standout result in 2025.

Shipping contributes around 3% of global emissions caused by human activities, and the industry has committed to tough targets to cut these. Reaching these targets requires a mix of strategies, including measures to improve energy efficiency, the adoption of alternative fuels, innovative ship design and methods of propulsion.

Decarbonization presents various challenges for an industry juggling new technologies alongside existing ways of working. For example, the industry will need to develop infrastructure to support vessels using alternative fuels, such as bunkering and maintenance, while at the same time phasing out fossil fuels. There are also potential safety issues with terminal operators and vessels’ crew handling alternative fuels that can be toxic or highly explosive.

There has been a renewed focus on climate change risk management post-Covid-19 after this peril dropped down the ranking during the pandemic years as companies dealt with more immediate challenges. The top three actions companies are taking to mitigate the direct impact of climate change according to respondents are: Adapting or increasing insurance protection (incl. alternative risk transfer); Adopting carbon-reducing business models (e.g., recycling and reducing waste, encouraging sustainable travel, developing more sustainable supply chains); and Creating contingency plans for climate-related eventualities (e.g., response and recovery, assessing critical systems and resources). More companies also say they are investing in clean technologies to reduce emissions.

Fire & Explosion

Fire and Explosion risk drops from its number one spot last year for the industry to tie in fourth place with Climate Change at 22% of marine industry respondents.

According to Allianz’s 2024 Safety & Shipping Report, there were more than 200 fire incidents (205) reported on board vessels over 100 gross tonnage (GT) during 2023, the second year in a row that this total has been exceeded – after a decade high 211 in 2022.

Fire remains a major cause of loss for large vessels, and recent years have seen several major fires involving Roll On-Roll Off (Ro-Ro) vessels and car carriers. Ro Ros can be more exposed to fire and stability issues than other vessels due to the nature of their cargo and their design. Incidents have coincided with the ongoing debate about the fire risks of transporting electric vehicles (EVs) powered by lithium ion batteries. Several Ro Ro ferry and car carrier operators have taken a cautious approach to transporting EVs while insurers have highlighted additional risks associated with lithium ion batteries, as well as the need to upgrade firefighting capabilities of Ro Ros accordingly.

The transportation of consumer goods, such as e scooters, that contain lithium-ion batteries is still not as good as it needs to be. Employees need to be trained in recognizing possibly damaged, or suspect batteries. In addition, all parties (suppliers, shippers, third party transporters, carriers, vessel crews and port and terminal workforces) must also be trained and drilled in the protocols that their employer should develop in case of an incident or the discovery of a suspect battery.

As industry and regulatory standards continue to evolve and be implemented, and technical solutions that could reduce the impact of any fire emerge, there is a benefit in supply chain transporters being proactive in this way, even though it may not yet be required by the various governing regulations. The cost of training will be infinitesimal compared to the cost of any major incident involving lithium ion batteries.

To read the full 2025 Allianz Risk Barometer, please visit: https://commercial.allianz.com/news-and-insights/reports/allianz-risk-barometer.html