INSURANCE costs for ships using the Malacca Strait, the world's busiest sea-lane, may rise after it was declared a high-risk area for war and terrorism by an insurance body that advises members of Lloyd's of London.I expect that the local governments, already feeling heat from other nations, will soom be hearing from more commercial shipping companies and ship operators about getting their anti-piracy act together. Money talks...
“Premiums, which vary according to underwriter, ship type and other factors, may rise,'' Neil Smith, marine manager at Lloyd's Market Association, said by phone from London yesterday. “Because of the general security situation in the Malacca strait, we felt it's an area that we cannot ignore.”
The waterway was added to 20 other areas, including Iraq, Lebanon and Nigeria, deemed a security threat to shipping, according to a June 20 list from the Lloyd's Market Association's Joint War Committee.
Shipowners have to inform underwriters that they plan to navigate in the country's waters and additional insurance costs may be levied for seven days' cover.
The Malacca Strait was the second-most dangerous area for pirate attacks on ships last year, according to the International Maritime Bureau. Indonesia's oil-rich Aceh province has been subject to a separatist rebellion.
Update: (July 3)-
A Malaysian port operator has downplayed the prospect of rising insurance costs for ships using the Malacca Strait after it was declared a high-risk area by an international insurance body.He hopes.
"I don't think that is going to happen to ships plying the Malacca Strait," Westport Malaysia executive chairman G. Gnanalingam told AFP on the weekend.
"Piracy has been there for the past 20 years," he said in reaction to a media report that insurance costs for ships sailing through the strait may increase due to security concerns.
Gnanalingam said he was confident that coordinated patrols by the three littoral states -- Malaysia, Indonesia and Singapore -- would be enough to ensure the security of the Malacca Strait.(source)