Monday, September 7, 2009

Anti-Piracy Assessment: Sept. 2009

Evolutionary Security Management, Inc. of Canada has issued their September, 2009 Anti-Piracy Assessment -

In reading the assessment, I found two points of particular interest, first, under "defensive Operator Issues" A failure of insurance companies and similar underwriters to balance their response to the activities and measures taken by ship owners and operators:

This is of particular interest as with the shipping companies we have talked with, the insurance companies are not providing an incentive for the shipping companies when they are exercising due care and giving proper preparation for transits through the known piracy areas. It seems that the insurance companies are blanketing everyone with the same charges without regard to the preparations taken.

An example of this would be that if you owned a car, and you had an absolute clean driving record, had taken extra driving school classes, your insurance carrier takes this into consideration. On the other hand, if your record is very bad, and you have taken no steps to show any due care in your driving habits, your insurance would be much higher.

If the insurance companies were to give incentives tot he shipping companies to exercise due care, properly harden their vessels and take the proper steps to mitigate risks, more of the shipping companies would be inclined to take these steps to save on the insurance premium.

The second point "Costs associated with on board security being out of sync with realistic costs and continuing not to consistently follow sound security management or incident management practices;"

We have seen on board security quotes of up to $185,000.00 for a one week transit. This kind of pricing is absolutely ridiculous, as a team of 5 for example, would never cost that much money, even when you include the air fare, visas, hotels, agency fees etc. Some security companies apparently are attempting to take advantage of the shipping industry rather than be a reasonably priced service provider. In addition, many security providers are giving quotations for service before they even take the opportunity to conduct a proper risk assessment for that particular vessel and it's transit.

Insurance companies need to start giving incentives to the shipping companies so that there is motivation to take the proper steps to safeguard their assets and crews, and security companies need to reign in their price structure to a reasonable level, and provide a sound service based in a proven security doctrine.

Read the September 2009 Anti-Piracy Assessment and give your thoughts.

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