Piracy - raising the cost and complexity of maritime insurance
by Media Services on 26 Oct 2011
It's no coincidence that Harvard Business School selected piracy as 2010's best business model. Though rather tongue in cheek, the label recognises the 'revenue' and 'ROI' that this modern day seafaring looting gleans for its proponents.
Somali pirates - well armed and often well trained. .. .
In response, London’s marine insurance community is in the forefront of devising strategies to thwart pirates, who operate mainly from untouchable bases in Somalia, from succeeding in their attacks on Indian Ocean shipping.
Catlin Group Limited, with operational hubs in London, Bermuda, the US, Europe and Asia, as well as being the managing agent of Lloyd’s largest syndicate, has therefore upped its efforts in the fight. Headed by Peter Dobbs, Catlin’s Asset Protection service offers coverage designed to deal specifically with the threats from pirates. He described the move as a 'natural extension' of Catlin’s marine and Lloyd’s business.
Lloyd’s roots go back to the need for marine insurance at the end of the 17th century, as the British Empire expanded its global reach. Until the end of the 19th century Lloyd’s was essentially a marine insurer. Although it’s a lot more than that nowadays, the marine tradition remains strong. But it needs to change.
'I think in the end the maritime industry is going to have to wake up,' Dobbs said; 'in the same way that the aviation industry had to wake up 40 years ago.' He cited the rash of hijackings that took place in the 60's, which imposed 'fairly draconian, – or at least what we though at the time were fairly draconian – security measures to prevent hijacking.' More recent events have served only to increase those security measures.
'I think it’s no longer possible now to have a vessel, valued at a hundred million dollars, with cargo valued at two hundred million dollars, and to allow that vessel through some of the rougher waters of the world completely unprotected.' As a result the maritime industry has to recognize 'the world has moved on; the world has changed, and I think possibly in the future we’re going to have to look at forms of security that the maritime industry haven’t been used to in the past.'
More at http://www.lloydslist.com/ll/sector/piracy-and-security/
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