Sep 122009

Pirates: Insurers could do more

While insurers continue to develop more piracy-related packages to offer shipowners, they have shown little inclination to reward or encourage those who do their due diligence to avoid pirates in the first place, says Canada-based risk assessment firm Evolutionary Security in its latest anti-piracy assessment. Despite an apparent, or reported, improvement in ships’ abilities to fight off pirates several trends are tending to reduce the industry’s overall ability to avoid, deter and repel attackers effectively.

The report considers the failure of insurance companies and similar underwriters to balance their response to the activities and measures taken by ship owners and operators a key issue.

“At this point in time, there does not seem to be any clear incentive for owners to implement security measures on board their vessels. While insurance rates have increased in response to the threat within the area, there is little known or advertised regarding a reduction in rates for those that have exercised due care in the protection of their assets. In this context, this is a significant omission when looking at the viability of certain routes and activities,” says the report.

Shipowners are also baulking at the cost of onboard security team, and, it would appear not without some justification: “Costs associated with on board security (are) out of synch with realistic costs and continuing not to consistently follow sound security management or incident management practices,” warns the report, “Costs with on board security can range from $60 000 for a week long transit, but can escalate quickly into the hundreds of thousands of dollars. Given the significant number of transits through the area, shipping companies sometimes opt out of having security on board their vessels (not only due to the inconvenience that it may pose) but also due to the financial impact. It should be noted that military forces (see below) promised to assist in this are no less expensive with some countries even charging $162000 per week for an eight man detachment, well higher than many service providers.”

At the same time vessels have failed “to integrate realistic security measures into their routines.”

With the rains fading, the next few months will determine just how wisely the maritime industry has spent its time of relative relief from pirate attacks. The new seasons will bring a crop of attackers who are better organised and possibly better led, better equipped, looking to replenish their valuable stock of hostage vessels after recent releases.

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