Ship insurers backing armed guards as piracy grows
Tue Sep 20, 2011 3:20pm GMT
* Insurers say no ships with armed guards captured yet
* Navies overstretched as Somali pirates go further out
* Famine in Somalia could draw more people into piracy
By Gus Trompiz
PARIS, Sept 20 (Reuters) - More ship insurers are backing the use of private
armed guards on merchant vessels at sea to combat Somali piracy as attacks
and the resulting costs are set to rise in coming weeks, industry officials
said on Tuesday.
Pirate attacks on oil tankers and other ships are costing the world economy
billions of dollars a year and navies have struggled to combat the menace,
especially in the vast Indian Ocean. Seaborne gangs are set to ramp up
attacks in the area after a monsoon abates.
A famine crisis in Somalia could also draw more people into piracy, shipping
"Piracy is clogging the arteries of globalisation," said Emma Russell with
underwriter Watkins, which is a member of the Lloyd's of London insurance
"No vessel with armed guards has yet been taken," Russell said.
Industry delegates at the annual conference of the International Union of
Maritime Insurance (IUMI), said there were more than 20,000 transits a year
in the Gulf of Aden and the Indian Ocean.
Speakers at the conference said the hiring of private armed guards to
accompany ships is increasingly seen as an effective deterrent against
pirates and as a complement to overstretched navies, many of whom face
Shipowners and insurers have until recently been reluctant to accept the use
of armed private contractors. They have hesitated partly due to legal
liabilities and risks, including the problem of bringing weapons into some
territorial waters and due to fear of escalating violence.
The IUMI said the use of private guards should comply with the legislation
of the flag state.
"It's not going to resolve the problem but at least it's going to protect
some of the vessels and property going through the Indian Ocean," IUMI
President Ole Wikborg said of private armed guards at a press briefing.
Individual insurers rejected any suggestion they were profiting from
providing piracy cover, saying premiums did not usually cover their costs in
ransom and damage claims, and with most piracy claims being met except where
war conditions applied.
French maritime economics institute ISEMAR said there were about 1,000
private guards being employed by ships to counter Somali pirates.
Industry group the Security Association for the Maritime Industry (SAMI),
which has 58 members, is aiming to have the first companies complete an
accreditation process by the second quarter of 2012, founding member Peter
This will result in a list of audited security firms able to provide armed
Cook said private firms would play an increasing role as navies face
spending reviews, citing prospects of a 30 percent decline in the size of
Western navies in the next 20 years.
"They're taking the policemen off the block," Cook said.
Shipowner associations, meanwhile, have called on the United Nations to
create an armed military force to be deployed on vessels to counter piracy
and restrict the growth of unregulated private contractors.
Attacks by Somali pirates could rise to 250 in 2011 from about 200 in each
of the two previous years, and pirates' profits have already outstripped
last year's $80 million by reaching some $120 million in the year to
September, Captain Xavier Mesnet of the French Navy, told the conference.
The use of private security avoided the need for intervention by navies but
would also likely lead pirates to change tactics and use greater violence,
Mesnet told Reuters the French navy had no plans to scale down its counter
piracy mission. (Editing by Jonathan Saul and Anthony Barker)
C Thomson Reuters 2011 All rights reserved
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Received on Tue Sep 20 2011 - 18:09:12 EDT