Piracy Study: Piracy – An ancient risk with modern faces
Allianz Global Corporate & Specialty (AGCS), a leading insurer of ships and cargo, has released a study suggesting its clients adapt their approach to marine insurance as the threat of piracy off the Horn of Africa continues to grow. In addition, the study points out that crews entering dangerous waters must be prepared to handle an attack, and it calls for a more coordinated solution to the current wave of piracy.
Download: Allianz Piracy Study
Key points from the study
The study looks at general piracy trends today, piracy hotspots, insurance solutions, modern piracy methods and risk mitigation. It provides a variety of sources as well as insights from Allianz experts from every part of the Marine insurance industry who have had first-hand experience with piracy cases.
- Most of the attention today is on the rise of piracy off the coast of Somalia and around the Gulf of Aden. 102 pirate attacks were reported here in the first quarter of 2009, compared to 53 in 2008. Somalia and the Gulf of Aden accounted for 61 of the total – up from 6 in 2008. Somalia is suffering from nearly 20 years of violent civil war, and its people live on an average of less than $2 a day. The causes of piracy there are so complex that the current problem is likely to continue for some time, and it is critical that ships passing through the region are well prepared and properly insured.
- The region is ideal for piracy because the Gulf of Aden is the gateway to the Suez Canal, and some 20,000 tankers, freighters and merchant ships pass through it every year. Pirates are now ranging farther and farther out to sea, attacking ships off the coast of neighboring countries such as Yemen, and their impact on global shipping is growing.
- The waters off Nigeria have also shown an increase in recent years, especially in the region off Lagos and the Bonny River, with 40 reported attacks in 2008 (Source: ICC – International Maritime Bureau). It is one of a few regions which are in danger of becoming a larger piracy hotspot.
- Piracy has generally shown a declining trend in other areas such as Southeast Asia, often due to a concentrated international response.
- The identification of pirates is often difficult, due to their use of small motor skiffs, which are hard to see on radar and can be mistaken for fishing craft. Therefore, reported data on piracy may be less than in reality.
- What works to reduce piracy in one region may not work in others. An international patrol effort has done a great deal to reduce attacks in the Malacca Straits. In the Indian Ocean off Somalia, however, the area of water is simply too vast to police, so military patrols only help a little and may even escalate violence. Therefore, a solution to the current wave of piracy will need a more integrated military, political and economic effort.
- The paper calls for a larger international effort to tackle the root causes of the current wave of piracy off the coast of Somalia and around the Gulf of Aden: poverty and violence on the mainland.
About Allianz Global Corporate & Specialty
Allianz Global Corporate & Specialty is the Allianz Group’s dedicated carrier for corporate and specialty insurance customers. The company provides insurance and risk management consultancy across the whole spectrum of Marine, Aviation and Corporate business, including Energy, Engineering, Financial Lines (incl. D&O), Liability and Property insurance, including International Insurance Programs. See the Allianz Global Corporate & Specialty website http://www.agcs.allianz.com for further details.
Worldwide, Allianz Global Corporate & Specialty operates in over 70 countries through the Allianz Group network. It employs more than 2,500 people and provides insurance solutions to more than half of the Fortune Global 500 companies, writing a total of €2.9 billion gross premium annually (2008).
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