Risk evaluation methods at individual ship and company level

Safety management and risk profiling to identify substandard ships are of importance to the shipping industry. Whereas current methods rely heavily on detention risk and flag state performance, we extend the risk assessment by considering various risk dimensions and by evaluating a wide range of risk factors. Apart from detention risk, we consider also the risk of various types of accidents (total loss, very serious, and serious) and damage (hull and machinery, cargo, pollution, loss of life, and third party liabilities). Risk factors include ship particulars like ship type and classes of companies and owners, as well as historical information on past accidents, inspections, and changes of particulars. We present methods to summarize and visualize various risk dimensions and we pay particular attention to the identification of potentially risky companies. The empirical results are obtained by combining rich data sets with information on ship arrivals, inspections, and accidents for the period from 2006 to 2010. The presented methods and results are of interest to various stakeholders in the industry, such as charterers, insurance companies, maritime administrations, and the International Maritime Organization.