Somali Piracy to “get worse?"

From Insurance Daily:

Pirate attacks off the coast of Somalia on the rise and could cause a significant increase in the price of shipped goods, according to a new report commissioned by Lloyd’s of London.

“(The) piracy risk is likely to get worse before it gets better,” the report said, echoing “serious concerns” over piracy voiced last month by the Group of Eight powers (G8).

“The cost of keeping global trade routes open could result in a growing ‘piracy tax’ that will be felt by a wider range of businesses and consumers, already battered by the effects of recession,” the Lloyd’s report said.

As insurance costs escalate with the pirate attacks, shipping companies are increasingly choosing longer sea routes to avoid the region.