Allianz Global Corporate & SpecialtyÂ Â (AGCS) has suggested that special war insurance policies be introduced to serve the needs of vessels that travel through areas at high risk of piracy. The report, â€œPiracy: An Ancient Risk With Modern Facesâ€, notes that â€œcurrently, many vessels are insured for piracy as part of their standard â€˜hull and machineryâ€™ insurance policiesâ€.
AGCS also said that there had been a growth in attacks in the waters of Nigeria, while in Southeast Asia attacks had been declining. AGCS said that the location of piracy dictated the means to combat it.
It explained that these policies were not specifically designed to address such issues as piracy, meaning that some ship-owners were paying for protection that they did not really need because they were not travelling through high-risk areas.
The war-risk cover could be specifically underwritten â€œto handle various exposures besides damage to the vessel and therefore can be priced more flexiblyâ€, AGCS wrote. According to the report there were 102 pirate attacks in Q1 off the coast of Somalia and around the Gulf of Aden, up form 53 in the same period last year.
While patrols worked for the Malacca Strait, in the Indian Ocean off Somalia â€œthe area of water is simply too vast to policeâ€. Broker Marsh said that rates had in some cases risen 20-fold. Head of marine insurance Markus Baker told Bloomberg that, with pirates now attacking up to 700 miles offshore, piracy had become â€œa pretty challenging piece of risk to underwriteâ€. He said that underwriting was agreed on a case-by-case basis, with faster boats obtaining better rates.