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Wednesday, September 14, 2005

Insurance and piracy

Insurance and pirates, arrgh!

Interesting assessment here, cites $25 billion in losses due to piracy and related bad acts.
The economic cost of piracy is difficult to estimate, according to John Burnett, author of Dangerous Waters, an account of modern piracy on the high seas, because some incidents of piracy go unreported. A ship owner whose ship and crew have been attacked typically does not want "to tie up the vessel for lengthy investigations," he says. "If there have been no injuries or deaths, then better to absorb the thievery, and carry on. Also, a ship might not want to report a successful attack because it indicates that the ship's crew was not as alert as it should have been–perhaps no fire hoses blasting outboard, no transom illuminated and no extra crew patrolling the aft decks."

Professor James Warren of the School of Asian Studies at Murdoch University in Australia puts the economic cost to maritime trade at $25 billion, basing the figure on a study done by Japanese analysts several years ago. This figure includes cargo scams, attacks and hijackings. The loss, while in the billions of dollars, is hardly a big-ticket item considering the $2 trillion generated by maritime commerce each year.

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