Piracy pushes up insurance premiums for ship owners

Though no Indian ships have been hijacked, the Indian shipowner has to pay high premium because of hardening international marine insurance market.

In a letter to the shipping ministry this month, Insa has informed that, depending upon the size, war risk premium for merchant vessels sailing in Indian Ocean has gone up from $500 per ship, per voyage to up to $150,000 per ship, per voyage.

At present, Insa has 39 members and represents 90% of India?s fleet.

Piracy, which was earlier restricted to the Gulf of Aden and Somali coast, has now spread to Cape of Good Hope and towards Lakshadweep, said Devil.

Devli said that since piracy became rampant in the Gulf of Aden, about 33 vessels have been hijacked and 711 sea-farers held captive. In the first two-months of 2011 (till February 28), 61 vessels have been attacked and 13 hijacked, Devli said, adding 243 crew are being held captive while seven have been killed.

Insa has requested the government to grant approval to have armed guards, preferably naval personnel, on-board its ships to deter piracy.

?We have sent letters to the government asking for naval armed guards or retired navy personnel to be deployed on our ships to fight-off pirates. We could also deploy private guards as a few other countries do, but the government should first communicate its view to us,? Devli said.

Ships with armed guards on them have been able to ward off pirates, he added.

If no decision is taken soon, shipowners would be forced to avoid the Gulf of Aden (where Somali pirates are running amuck) and take other longer routes such as the Cape of Good Hope, Devli said. ?This will, however, have a tremendous economic impact as costs will zoom and transport-time also increases,? he added.