Dive Brief:
- Catastrophe risk management firm RMS Analysis revealed the ten ports with the highest risk of severe property loss due to a catastrophe.
- The ports of Nagoya, Japan and Guangzhou, China led the list with over $2 billion in cargo losses from an estimated catastrophe. Meanwhile, six ports on the U.S. Gulf Coast could lose more than $800 million of cargo each, according to the report.
- The report was written for marine insurers and reinsurers on the anniversary of the 2015 Tianjin port explosion which caused more than $3 billion in marine insurance losses.
Dive Insight:
Marine insurers have paid over $6 billion over the past four years due to global catastrophes. In addition to the 2015 man-made Tianjin port explosion, the 2012 Superstorm Sandy and the 2011 Tohoku earthquake and tsunami led to severe port damage and consequent cargo losses.
For that reason, the risk management firm created "the industry's first marine cargo and specie risk tool" to help insurers and port authorities estimate risk exposure due to catastrophes. The model accounts for cargo type, storage type, precise storage location (whether estuarine or within a dock complex) and dwell time.
"Surprisingly, a port's size and its catastrophe loss potential are not strongly correlated," said Chris Folkman, director of product management at RMS.
The proliferation of larger cargo vessels have rendered seaside ports the norm, despite their increased vulnerability to hurricanes and earthquakes, when built on landfill. "The value of global catastrophe-exposed cargo is huge and is expected to continue growing," Folkman added.
The analysis revealed the U.S. Gulf Coast was particularly vulnerable due to the potential for hurricane impact on small ports. The six high-risk ports mentioned include: Plaquemines, LA; New Orleans, LA; Pascagoula, MS; Beaumont, TX; Baton Rouge, LA; and Houston, TX.
