The potential economic aggregate loss from the ONE Henry Hudson ship fire may amount to $450 million if considered a total loss, according to analysis by the Russell Group.
The analysis by the Russell Group was based on the average of the previous four journeys made by the Henry Hudson between Tokyo and Los Angeles, where the ship had docked before the fire started. The peak over these journeys has been as much as $580 million.
Further analysis highlighted that the items on board the ship may include electrical components and equipment such as cells and power storage batteries, along with construction machinery.
While the cause of the fire is still being investigated, news reports have suggested that the fire may have been caused by electrical items.
According to the Russell Group’s analysis, $19.8 billion of goods are exported every year from Tokyo to Los Angeles, out of a combined total of $35.4 billion annually between the US and Japan.
The Tokyo to Los Angeles route is a key corridor for US–Japan trade, an aggregation risk that underwriters must factor into their insurance and reinsurance exposure calculations.
READ: ONE Henry Hudson fire substantially contained off Los Angeles
Russell Group’s Head of Business Development Julian Kirkman-Page said: “While the extent of the damage from the fire is not known yet, the high concentration of commodities such as batteries and construction machinery suggests that the car and energy industries may be exposed to this incident.
“Trade threat intelligence at company, ship, port and commodity level is becoming an essential requirement for companies and their insurers in having a better understanding of their accumulation risks.”
Earlier this month, three crew members died, and another three were injured following a fire aboard a Maersk-chartered container vessel at Malaysia’s Port of Tanjung Pelepas.
For more information:
Russell Group – https://www.russell.co.uk/
