Marine insurance rates to soar as piracy increases
Pirate attacks are driving up insurance costs around the world, according to local and international reports.
Last week Somali pirates hijacked a Saudi supertanker with a $US100 million ($160 million) oil cargo – the biggest act of piracy ever recorded.
US Defence Department figures show that of 95 piracy attacks off the Somali coast this year 39 have been successful. Somali pirates are currently holding at least 18 ships and 330 mariners from 25 countries.
The rise of piracy off Somalia this year has driven up insurance premiums in Europe and the US, forced shipping companies to divert around South Africa and promoted several nations to provide naval escorts in the area.
But Associated Marine CEO Stephen Ford told insuranceNEWS.com.au there has been no discussion in Australia yet if rates will have to rise because of the increase in piracy.
“It’s too early to say if the recent piracy will affect rates,” he said. “Our position is that we don’t discuss individual contracts.”
UK insurer Benfield announced on Friday a new marine ransom and extortion policy following the hijacking of the Saudi supertanker.
The worldwide policy offers limits up to $US10 million ($15.75 million) and covers against kidnapping and extortion, lost ransom and costs involved in resolving a hijack situation.
Shipping analysts overseas have predicted the cost of transporting freight will leap as a result of higher insurance premiums and an increase in charter rates.
Last week Somali pirates hijacked a Saudi supertanker with a $US100 million ($160 million) oil cargo – the biggest act of piracy ever recorded.
US Defence Department figures show that of 95 piracy attacks off the Somali coast this year 39 have been successful. Somali pirates are currently holding at least 18 ships and 330 mariners from 25 countries.
The rise of piracy off Somalia this year has driven up insurance premiums in Europe and the US, forced shipping companies to divert around South Africa and promoted several nations to provide naval escorts in the area.
But Associated Marine CEO Stephen Ford told insuranceNEWS.com.au there has been no discussion in Australia yet if rates will have to rise because of the increase in piracy.
“It’s too early to say if the recent piracy will affect rates,” he said. “Our position is that we don’t discuss individual contracts.”
UK insurer Benfield announced on Friday a new marine ransom and extortion policy following the hijacking of the Saudi supertanker.
The worldwide policy offers limits up to $US10 million ($15.75 million) and covers against kidnapping and extortion, lost ransom and costs involved in resolving a hijack situation.
Shipping analysts overseas have predicted the cost of transporting freight will leap as a result of higher insurance premiums and an increase in charter rates.