$300-$500m from Gulf of Aden cover for $100m in ransoms
Lloyd's chairman Lord Levene has said the world is seeing the biggest upsurge in piracy for four centuries, but talking up piracy is boosting insurers profits the FT reports.
Chief executive Richard Ward has spoken of millions of young men in failing states around the world looking with envy at pirate attacks perpetrated by gangs of marauding Somalis in the Gulf of Aden.
But the number of piracy attacks are down in many regions. Nearly 20,000 ships pass through the Gulf of Aden each year. Actual and attempted piracy and armed robbery incidents in the region numbered 100.
That average of 11 attacks per month would mean less than 0.7% of shipping was affected.
Profits from piracy
The FT says insurers playing up the fears have benefited. From 2005, piracy risks have moved from a yearly hull insurance policy to a pricier "war risk" coverage per voyage.
This has given insurers about $300m-$500m of premium in the Gulf of Aden in 2008 compared with roughly $100m (£60m, €70m) paid in ransoms.
