A huge change is on the horizon for the shipping industry as autonomous ships become a reality.

For Bermuda, the challenges and opportunities this will bring are likely to be felt in a number of sectors.

Some of the world’s major shipping operators are domiciled on the island, and many Bermudian-based insurers and reinsurers provide coverage for the maritime industry.

The idea of crewless ships, or robot vessels, plying the world’s oceans is no longer science-fiction. The technology is being refined and the first autonomous commercial ship will begin trials next year.

Within the coming decade it is expected that crewless ships will revolutionise the maritime industry.

Autonomous shipping was one of three developments highlighted by XL Catlin in its second quarter Emerging Risks Report.

The report noted: “Similar to autonomous trucks on the roads, autonomous vessels at sea controlled by onshore crews are expected to reduce risks and costs associated with human error and crew on-board, while having efficiency benefits.”

However, there are legal and regulatory challenges to be overcome, including the question of liability should things go wrong, and the threat of cyberattack.

Stephen Harris, senior vice-president of Marsh Global Marine Practice, noted some of the risks in a feature on Marsh & McLennan’s BRINK website last week.

He discussed the legal and regulatory hurdles ahead, such as whether a “captain” sitting at a desk on shore is legally part of an autonomous ship’s crew. He said it was something that was “likely to be viewed differently by various legal jurisdictions as they apply the law to insurance claims for physical loss or damage to the ship”.

Mr Harris added: “That’s only the start of the legal issues. What status should be given the programmer who designed the computer system that runs the autonomous ship? Where does liability fall? With fully automated vessels, could ship owners claim coverage for loss or damage to the vessel caused by the negligence of programmers?

“These are debates that the insurance industry needs to have before people start ordering these vessels.”

The technology of autonomous ships and its potential impact is something that Jens Alers is also keeping an eye on. He is group director of Bernhard Schulte Shipmanagement (Bermuda), which has offices in Par-la-Ville Road.

He said: “Within the next five years unmanned ships will become a reality in limited domestic short-distance cargo trades. In fact, Yara, a Norwegian chemical company, has already ordered a small autonomous ferry for the transportation of containerised cargo across a Norwegian fjord, thereby eliminating thousands of road truck loads every year.”

Yara International ASA’s first autonomous vessel, Yara Birkeland, will sail next year, initially with a crew before becoming fully crewless in 2020.

“In due course we could also see some limited distance passenger ferry trade, but where ‘human cargo’ is involved rules and regulations will make it a lot harder to get the idea of unmanned ships from concept to reality,” said Mr Alers.

“Within my lifetime we will see fully autonomous ships of all types in operation worldwide.”

There are economic arguments supporting the development of autonomous ships. For instance, human error accounts for 96 per cent of all marine casualties, according to the US Coast Guard. Crews are vulnerable to piracy in some areas of the world, and there is a severe shortage of skilled workers seeking a career at sea.

Purpose-built crewless ships would not need crew quarters, or a command bridge, increasing the efficient use of space and design and eliminating a variety of operating costs. It is envisaged they would be controlled by onshore operators.

Rolls-Royce, the jet engine maker, is one of the leaders in the development of autonomous shipping. It is part of the Advance Autonomous Waterbourne Applications initiative.

Mikael Makinen, president of Rolls-Royce’s Marine business, said: “Autonomous shipping is the future of the maritime industry. As disruptive as the smartphone, the smart ship will revolutionise he landscape of ship design and operations.”

The company plans to release an autonomous remote-controlled cargo ship in 2020.

World leading mining companies BHP Billiton and Rio Tinto already use driverless trucks. Rio Tinto is about to deploy autonomous trains in Australia, and both companies are investigating the use of crewless ships.

Challenges for testing and developing autonomous maritime technology, and legal implications, safety and security issues and developing a universal regulatory framework, will be discussed at the three-day Autonomous Ship Technology Symposium in Amsterdam, in June 2018.

Alluding to some of the challenges, Mr Alers said hurdles to overcome include the need for shoreside infrastructure and technology that integrates with the on-board systems of the ships.

He said: “Even in a high-tech world accidents still happen. We will need to rewrite the rule book of risk assessment, liability and claims for the world of autonomous ships.

“Insurance companies, classification societies, ship registries and regulators will have to rethink completely in an on-board world devoid of a captain and a chief engineer and their seafaring colleagues.

“The ultimate reward for an insurer will of course be the elimination or, at the least, drastic reduction of the factor which today leads to most maritime accidents: human error.”

While it is expected that the need for on-board crews will be reduced and eventually eliminated, Mr Alers believes there will still be a need for hands-on repair and maintenance of the ships.

And he added: “Autonomous ships are a fascinating subject and one day they will be reality. As is often the case, the voyage to that ultimate goal will present big transitional challenges.”