Japan and China home to world’s riskiest ports

Nagoya in Japan and Guangzhou in China are home to the world riskiest ports, according to new research by RMS.

The risk management firm said the potential loss from a catastrophe at the Nagoya port is $2.3bn, while Guangzhou is not far behind at $2bn.

The analysis took into account a port’s cargo type (e.g. autos, bulk grains, electronics, specie), storage location (e.g. coastal, estuarine, waterside or within dock complex), storage type (e.g. open air, warehouse, container) and dwell time.

Six of the remaining top 10 riskiest ports are in the US, with the remaining two in Europe.

RMS said that the findings will cause concern among marine insurers and reinsurers coming after four years of marine catastrophes which have generated billions of dollars in marine insurance losses: 2015 Tianjin explosion (more than $3bn), 2012 Superstorm Sandy (estimated: $3bn marine loss), and the 2011 Tohoku earthquake and tsunami.

RMS director product management Chris Folkman said “Surprisingly, a port’s size and its catastrophe loss potential are not strongly correlated. For example, while China may be king for volume of container traffic, our study found that many smaller US ports rank more highly for risk – largely due to hurricanes.

“Our analysis proves what we’ve long suspected – that outdated techniques and incomplete data have obscured many high-risk locations. The industry needs to cease its guessing game when determining catastrophe risk and port accumulations.”

Folkman added: “The value of global catastrophe-exposed cargo is huge and is expected to continue growing.”

To conduct the analysis RMS marine risk experts used the new RMS Marine Cargo Model to calculate the 1-in-500 year loss for each port.

The team employed the model’s geospatial analysis of thousands of square km of satellite imagery across ports in almost 80 countries and allocated risk exposure across large, complex terminals to assess the ports’ exposure and accumulations.