Marine insurance on the rise thanks to Somali piracy
The price of protecting a ship or its cargo against piracy through insurance was rising, he said, and this would feed the reinsurance market.
Underwriters estimate that shipowners have paid about $20m in ransoms to pirates this year, substantially pushing up the cost of claims.
Lord Levene, chairman of Lloyd’s, said insurers did not want to pay ransoms but this appeared to be the only means of resolving incidents. “The real solution is to stop these people from operating. That is what we have to concentrate on,” he said, calling for more resources for naval forces.
Insurers said that while shipowners and operators faced the prospect of higher policy prices, there was no risk of cover against pirate attacks being withdrawn.
“Lloyd’s job is … to take on risks from industry around the world. This is a big risk and it is for us to do it. We have to price that cover commercially,” said Lord Levene.
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