Only 85 large ships worldwide sustained damage beyond repair at sea last year - the lowest level of shipping losses in the past decade.
The figure was a marked fall from 101 losses in 2015, said a new report out yesterday.
Last year, more than a quarter or 23 of the losses globally were in the busy shipping lanes in the South-east Asian region. This was also the top hot spot for losses for the last decade.
Allianz Global Corporate & Specialty (AGCS) said in its fifth annual safety and shipping review that the improvement in numbers worldwide was largely driven by the development of a more robust safety environment. The review analyses reported shipping losses for vessels of above 100 gross tonnes.
The number of shipping incidents or casualties - events such as a fire, explosion or collision - was also down by 4 per cent year on year to 2,611, it said. Cargo vessels accounted for more than a third of all vessels lost, while the number of passenger ferry losses rose slightly, driven by activity in the Mediterranean and South-east Asia.
The review said standards remain an issue in some parts of Asia, "with bad weather, poor maintenance, weak enforcement of regulations and overcrowding contributing to loss activity".
Sinking remained the most common cause for global shipping losses, accounting for more than half of all the losses in 2016, often with bad weather as a factor.
Over a third of the total shipping casualties last year were caused by machinery damage. This drove a 16 per cent rise in incidents in the East Mediterranean and Black Sea region, which has replaced the British Isles as the top incident location.
The South-east Asian region is the third top incident location, with 9 per cent or 241 casualties of the 2,611 worldwide there last year. The region has seen a rising casualty trend over the last decade, with piracy and collision the two most common causes for such incidents.
Mr Baptiste Ossena, global product leader for hull and marine liability at AGCS, said: "While the long-term downward loss trend is encouraging, there can be no room for complacency. The shipping sector is being buffeted by a number of interconnected risks at a time of inherent economic challenges."
Environmental scrutiny, for instance, is on the rise, and the cost of complying could have significant impact on already-stressed shippers, while political risk is increasing, with activity in hot spots such as Yemen and the South China Sea possibly affecting vessel routes. The threat of offshore cyber attacks is significant as well.
"A 'perfect storm' of increasing regulatory pressure combined with narrowing margins and new risks is gathering," said Mr Ossena.