Ship underwriters widen Somali piracy threat zone

Monday, 27 December 2010 00:01 -     - {{hitsCtrl.values.hits}}

  • Capabilities of pirate gangs increasing
  • Seafarers’ union backing use of private armed guards

LONDON (Reuters) - London’s marine insurance market has widened the stretch of waterways deemed at high risk from Somali pirates as the armed gangs strike further out at sea, industry officials say.

The move is expected to raise insurance premiums for ship owners, reflecting the growing pirate threat.

Pirates are making tens of millions of dollars in ransoms from seizing merchant ships in the Indian Ocean and the Gulf of Aden, despite the efforts of foreign navies to clamp down on such attacks.

In recent weeks, pirates have struck as far south as Tanzania and Madagascar, with the easternmost attack yet this month close to the coast of India.

“There is no question the pirates have got big mother ships out there,” Neil Roberts, a senior technical executive with the Lloyd’s Market Association (LMA), told Reuters.

“These are long range vessels which can support operations much further off Somalia,” said Roberts, whose association represents all underwriting businesses in the Lloyd’s insurance market.

The Joint War Committee, which groups syndicate members from the LMA and representatives from the London insurance company market, last week added the Gulf of Oman and a wider stretch of the Indian Ocean to a list of areas it considered high risk for merchant vessels and prone to war, strikes, terrorism and related perils.

“We are recognising the developing threat that is out there. Ship owners are on their own to some extent at the further reaches,” Roberts said.

“It’s our job to notify when there is a problem and there certainly is,” he said.

Analysts said merchant shipping faced mounting costs.

“The number of hijackings is increasing, and insurers will presumably have to charge more in order to be able to financially absorb the greater cost of claims,” said John Drake, senior risk consultant with AKE Ltd.


J. Peter Pham, an African security adviser to U.S. and European governments and private companies, said ships transiting the western Indian Ocean were likely to see an increase in insurance premiums.

“I would anticipate that the cost of piracy ‘riders’ on insurance will rise to reflect this real risk over a larger area,” he said.

Despite successful efforts to quell attacks in the Gulf of Aden, international naval forces have struggled to contain piracy in the Indian Ocean owing to the vast distances involved.

This has led to mounting worries among ship owners and seafarers who feel their lives are in the firing line as pirates launch increasingly violent attacks.

“The threat to seafarers who have to run a gauntlet of small arms fire and risk of capture and incarceration is unacceptable,” said Peter Hinchliffe, secretary general of the International Chamber of Shipping, which represents about 80 percent of the global industry.

Some shipping companies and a growing number of mariners are backing the use of private armed guards on board vessels. “We are now not opposed to the use of armed guards on ships,” said Andrew Linington, with seafarers’ union Nautilus International. “With this massive expansion of piracy areas, it becomes more essential that seafarers have some form of protection. There is only so much naval forces are able to do.”

Pirates seize cargo ship off Oman coast

Suspected Somali pirates have hijacked a merchant ship with 27 crew off the sultanate of Oman, the head of a regional maritime group and the European Union Naval Force of Somalia said on Saturday.

Andrew Mwangura of the Kenyan-based East African Seafarers Assistance Programme said the pirates had seized the Thai-flagged vessel early on Saturday while sailing from the United Arab Emirates.

‘Reports reaching Mombasa indicate that early this morning pirates sized MV Thor Nexus some 350 nautical miles east of Salalah, Oman,’ Mwangura said in a statement.

Mwangura added that it was likely the pirates were Somalis. ‘They are the ones known to do this,’ he told Reuters by phone.

The European Union Naval Force (EU Navfor) said in a statement the general cargo ship has a weight of 20,377 tonnes, and put the area of the hijacking at 450 nautical miles north east of Socotra island in the Indian Ocean.

Mwangura said the vessel was heading to Bangladesh, not Pakistan as reported earlier. EU Navfor also gave as its destination as Bangladesh. ‘No details of the attack are known at this stage,’ EU Navfor said.

Pirates are making tens of millions of dollars in ransoms from seizing merchant ships in the Indian Ocean and the Gulf of Aden, despite efforts by foreign navies to clamp down on such attacks.

The hijackings have driven up insurance premiums and forced ships to take longer, costlier routes to avoid piracy hot spots.

Industry officials say marine insurers in London’s insurance market have widened the stretch of waterways deemed at high risk from Somali pirates as the armed gangs strike further out at sea.-Reuters

Somali pirates hijack UAE cargo vessel

Somali pirates hijacked a cargo vessel from the UAE yesterday after firing small arms and rocket propelled grenades at the ship, Europe’s anti-piracy mission said.

The Orna was seized in the Indian Ocean around 400 nautical miles northeast of the Seychelles archipelago, according to a report in our sister newspaper Gulf Daily News.

At least four pirates boarded the ship after stopping it, the statement said, adding that the crew was co-operating with the assailants and no damage was reported.