Piracy will increase costs, insurers say
Piracy risk and insurance costs associated with it are expected to rise in the coming years, a panel of marine insurers said.
“Rates and charges may well escalate if the number of successful piracy attacks increases,” said Paul Newton, head of hull and yacht underwriting in Britain with insurer Allianz Global Corporate & Specialty, according to a Reuters report Monday.
A recent report from the insurer Lloyd’s of London spelled out the potential consequences of piracy — including longer sea voyages and piracy fees added by carriers onto shippers' bills.
“The cost of keeping global trade routes open could result in a growing ‘piracy tax’ that will be felt by a wider range of businesses and consumers, already battered by the effects of recession,” the Lloyd’s report said.
The Reuters report said 20,000 ships pass through the Suez Canal each year, and most cross the pirate-infested waters off the coast of Somalia. While attacks have diminished in recent weeks, as weather in those waters has been poor, insurers expect the attacks to recommence. International naval efforts to curtail attacks have been hampered by the sheer expanse of ocean in which the pirates operate.
'We welcome the efforts made by the international community to tackle the problem of piracy which is a threat to important international lanes,” said Soren Skou, chief executive of A.P. Moller – Maersk’s Maersk Tankers unit. “However, the problem has not gone away and a long-term solution is needed.”