I have noticed the same across various maps at times. Watching the AI, they seem to prioritize building improvements first, ships second. I am not sure how to change this or if it can be changed, hence I added additional ships to each scenario. I put this down to being an older game, but i'll look into it further.

I am going to release another update and reduce aggression between AI nations, right now its set to max so they seem more interested in fighting than building haha, this should fix some of those issues.

I have just released v1.2 on moddb, please download and update. I have reduced aggression between AI factions, hopefully they are less interested in blowing each other up and more inclined to build a fleet now. Tested on Andaman Sea and definitely noticed a difference.

Yes I know why this is happening too. Like the player, the AI needs ships to build ships, unfortunately the AI can be very reckless with their ships and sometimes throw them away. When the AI ships are all destroyed, they cease to do anything, I could update objective to capture all ports and trigger a fleet build when the AI fleet is lost, so they should always have one available but that will require testing, i'll look into it.

So I witnesses the AI play Andaman Sea about 10 times and every time was different. Sometimes they build lots of ships, sometimes not, also the nations strength changed between games, there was one where even Portuguese came out of top, so every play through is different. He is playing on the latest version 1.2 download? That did make a bit of difference in my observations.
I also had a look at objectives and can get a fleet to build again once destroyed, unfortunately I can only make this happen once and it requires a lot of work. Once an objective is complete, it expires, just a limitation of the game.

No problem the mod is already great how it is, and yes he is playing on 1.2. The game is old so limitations like those are normal and the pathfind is also abysmal sometimes but that´s how it was in the old games. Thanks a lot for your hard work and looking into things to see if it can be improved. It would be great if the game sold more now thanks to this mod which ads a lot more of replayability to this game.

Thank you, I'm just happy I could get the mod to work. I am looking into adding start of game teams, so. make nations allied on a team. I have been able to successfully test it, but it takes a lot to implement, however, it could make the game harder I guess, for example, you could make all nations allied against you if you wanted to.
Prior to making this mod I tried Port Royale 4, but could not get used to the turn based combat, I thought it was awful, personally. If a studio made a modern Port Royale with Corsairs combat they would have my money for sure!

Adventure Mode Launcher 1.3 update is now available for download of ModDB.
Version 1.3 adds the ability to select teams for each nation. Make nations allies, or enemies, or set yourself the ultimate challenge and pit all AI nations against yourself!
https://www.moddb.com/mods/adventure-mode-launcher/downloads/adventure-mode-launcher