Piracy Threat Grows for Marine Insurers

Piracy is a growing source of concern for marine insurers, as economic conditions in some of the world's trouble spots are leading to an upsurge in attacks on shipping.

Karsten von Hoesslin, from Denmark-based Risk Intelligence, told delegates at the International Union of Marine Insurance conference in Bruges, Belgium, that hijackings and attempted hijackings made up a substantial percentage of the attacks that have been reported worldwide so far in 2009, with April seeing a spike in the Gulf of Aden and the Somali Basin off eastern Africa. According to von Hoesslin, pirate attacks have seen a success rate of around 22% this year, with one of the possible reasons behind the rise in attacks being a shortage of currency in Somalia.

Looking at Southeast Asia, the number of attacks there remain lower than in previous years, but with unemployment rising in Malaysia, there has been a greater focus on possible piracy around the nearby Riu Islands. Von Hoesslin said large criminal syndicates are still operating in the Singapore Straits and off the coasts of Johar and Vietnam, with up to 25% of attacks possibly involving seamen on board the affected ships.

Pirate activity off the coast of South America remains scattered, von Hoesslin said, but there had been a rise in incidents near Venezuela in the wake of the radical nationalization of oil assets there.

Von Hoesslin also said the Niger Delta in western Africa is a trouble spot, where local ethnic and political tensions have led to a rise in the number of incidents in the area. This year has seen more piracy in the area, but with a local amnesty in place for pirates and other political moves taking place in oil-rich Nigeria, the number of attacks might have peaked.

Looking in more detail at recent events off the coast of Somalia, Mohammed Souri, chairman and managing director of the National Iranian Tanker Committee, said that 55% of recent attacks have taken place in the Gulf of Aden, with 35% reported off the coast of Somalia and the remaining 10% out to sea in the Indian Ocean.

Souri pointed to a rise in the number of attacks in this area, 114 so far being reported in the first six months of 2009. The total for all of 2008 came to 111. According to Souri, the southwest monsoon is currently dying down, which will probably lead to an increase in the number of attacks as the end of the monsoon will mean calmer seas and less chance that the small boats the pirates use might get swamped.

According to Souri, the NITC has found that basic security measures such as travelling at more than 15 knots, staying well out to sea, training crews in anti-piracy drills, keeping in contact with friendly naval vessels, installing barbed wire around access points and locking doors that lead to essential areas like the bridge and engine room, could help to lessen the chances of an attack succeeding.