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Marine Risks

Marine Piracy Rate Dropping

Global piracy is being mitigated while insurers hold steady on policies and practices.
By: | March 12, 2018 • 4 min read

Global acts of piracy dropped by almost 6 percent in 2017, according to an annual report by the International Maritime Bureau (IMB), part of the International Chamber of Commerce. A total of 180 incidents of piracy and armed robbery attempts against ships were reported in 2017, which is the lowest annual number of incidents since 1995, when 188 reports were received. In 2016, a total of 191 incidents were reported, with 150 vessels boarded and 151 crewmembers taken hostage.

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According to the most recent report by IMB, in 2017, 136 vessels were boarded, while there were 22 attempted attacks, 16 vessels fired upon and six vessels hijacked. In 15 separate incidents, 91 crewmembers were taken hostage and 75 were kidnapped from their vessels in 13 other incidents. Three crewmembers were killed in 2017 and six injured.

Beyond the global figures, the report underlined several themes from 2017. Most notably there remains persistent danger in the Gulf of Guinea, while the other side of that continent remains warm despite sentencing of some Somali pirates. IMB also reported “mixed results” in Southeast Asia.

Off the west coast of Africa in 2017 there were 36 reported incidents. No vessels were hijacked but there were 10 incidents of kidnapping involving 65 crewmembers in or around Nigerian waters. Seven vessels reported being fired upon in the Gulf of Guinea, a high concentration of 44 percent out of a global total of just 16.

Pottengal Mukundan, director, International Maritime Bureau

“Although the number of attacks is down this year in comparison with last year,” said Pottengal Mukundan, director of IMB, “the Gulf of Guinea and the waters around Nigeria remain a threat to seafarers. The Nigerian authorities have intervened in a number of incidents helping to prevent incidents from escalating.”

Neil Roberts, head of marine and aviation at Lloyd’s Market Association, concurred that “incidents of piracy and violence are increasing in Nigerian waters, and that country refuses to allow international intervention. They will permit their own armed guards, but will not allow guards of other nationalities.”

Roberts contrasted that to the notable successes in other hot spots. “The three legs of the anti-piracy stool are crew awareness, international naval support and armed guards. Where all three of those are present, there have been no successful attacks. The international cooperation against piracy in the Indian Ocean especially is unprecedented. Nowhere else do you have the Americans and the Russians and the Chinese working together, communicating directly on the same radio frequency.”

That collaboration was first formed to combat piracy off the Horn of Africa, which remains a hot spot. IMB reported that nine incidents were recorded off Somalia in 2017, up from two in 2016. In November, a container ship was attacked by armed pirates approximately 280 nautical miles east of Mogadishu. The pirates, unable to board the vessel due to the ship’s evasive maneuvering, fired two RPG rockets, both of which missed, before retreating.

“Although the number of attacks is down this year in comparison with last year, the Gulf of Guinea and the waters around Nigeria remain a threat to seafarers. The Nigerian authorities have intervened in a number of incidents helping to prevent incidents from escalating.” — Pottengal Mukundan, director, International Maritime Bureau

Six Somali pirates were subsequently detained by the European Union Naval Force, transferred to the Seychelles and charged with “committing an act of piracy” where they face up to 30 years’ imprisonment if convicted.

“That dramatic incident, alongside our 2017 figures, demonstrates that Somali pirates retain the capability and intent to launch attacks against merchant vessels hundreds of miles from their coastline,” said Mukundan.

On the other side of the Indian Ocean, Indonesia recorded 43 incidents in 2017, down from 49 in 2016. The IMB report notes that Indonesian Marine Police patrols continue to be effective in the country’s 10 designated safe anchorages.

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In the Philippines, however, the number of reported incidents has more than doubled, from 10 in 2016 to 22 in 2017. According to the report, the majority of these incidents were low-level attacks on anchored vessels, mainly at the ports of Manila and Batangas.

Vessels underway off the Southern Philippines were boarded and crew kidnapped in the first quarter of 2017.  However, alerts broadcast by the IMB’s Piracy Reporting Center, on behalf of the Philippine authorities, have since helped to avoid further successful attacks.

Overall, Roberts, who is secretary of the Ocean Hull committee of the International Union of Maritime Insurers, and also sits on its political panel, said that “piracy has been reduced to the level of an annoyance rather than a serious impediment to maritime commerce. Indeed trade goes on, and there does not seem to be any need to change policies.”

The last major change recommended by IUMI was in 2008 when piracy as a peril was shifted from hull to war, together with terrorism. “The hull underwriters were not keen on that because there was a deductible, but as claims escalated it makes sense to group like perils together,” said Roberts. “In the end, the recommendation was widely accepted.” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

The risk manager for Boyd Gaming Corp. says curiosity keeps him engaged, and continual education will be the key to managing emerging risks.
By: | May 1, 2018 • 4 min read

R&I: What was your first job?

I was trained as an accountant, worked in public accounting and became a CPA. Being comfortable with numbers is helpful in my current role, and obviously, the language of business is financial statements, so it helps.

R&I: How did you come to work in risk management?

Working in finance in the corporate environment included the review of budgets and the analysis of business expenses. I quickly found the area of benefits and insurance — and how “accepting risk” impacted those expenses — to be fascinating. I asked a lot of questions. Be careful what you ask for — I soon found myself responsible for those insurance areas and haven’t looked back!

R&I: What is the risk management community doing right?

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I have found the risk management community to be a close-knit group, whether that’s industry professionals, risk managers with other companies or support organizations like RIMS and other regional groups. The expertise of the carriers and specialty vendors to develop new products and programs, along with the appropriate education, will continue to be of key importance to companies going forward.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As I’m sure many in the insurance field would agree, Hurricanes Katrina and Rita in 2005 changed our world and our industry. It was a particularly intense time and certainly a baptism by fire for people like me who were relatively new to the industry. This event clearly accelerated the switch to the acceptance of more risk, which impacted mitigation strategies and programs.

Bob Berglund, vice president, benefits and insurance, Boyd Gaming Corp.

R&I: What emerging commercial risk most concerns you?

The fast-paced threat that cyber security represents today. Our company, like so many companies, is reliant upon computers, software and IT expertise in our everyday existence. This new risk has forged an even stronger relationship between risk management and our IT department as we work together to address this growing threat.

Additionally, the shooting event in Las Vegas in 2017 will have an enduring impact on firms that host large gatherings and arena-style events all over the world, and our company is no exception.

R&I: What insurance carrier do you have the highest opinion of?

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With the various types of insurance programs we employ, I have been fortunate to work with most of the large national and international carriers — all of whom employ talented people with a vast array of resources.

R&I:  How much business do you do direct versus going through a broker?

We use brokers for many of our professional coverages, such as property, casualty, D&O and cyber. We are self-insured under our health plans, with close to 25,000 members. We tend to manage those programs internally and utilize direct relationships with carriers and specialty vendors to tailor a plan that works best for team members.

R&I: Who is your mentor and why?

I have been fortunate to have worked alongside some smart and insightful people during my career. A key piece of advice, said in many different ways, has served me well. Simply stated: “Seek to understand before being understood.”

What this has meant to me is try everything you can to learn about something, new or old. After you have gained this knowledge, you can begin to access and maybe suggest changes or adjustments. Being curious has always been a personal enjoyment for me in business, and I have found people are more than willing to lend a hand, offer information and advice — you just need to ask. Building those alliances and foundations of knowledge on a subject matter makes tackling the future more exciting and fruitful.

R&I: What have you accomplished that you are proudest of?

Our benefit health plan is much more than handing out an insurance card at the beginning of the year. We encourage our team members and their families to learn about their personal health, get engaged in a variety of health and wellness programs and try to live life in the healthiest possible way. The result of that is literally hundreds of testimonials from our members every year on how they have lost weight, changed their lifestyle and gotten off medications. It is extremely rewarding and is a testament to [our] close-knit corporate culture.

R&I: What’s the best restaurant you’ve ever eaten at?

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Some will remember the volcano eruption in Iceland in spring of 2010. I was just finishing a week of meetings in London with Lloyd’s syndicates related to our property insurance placement when the airspace in England and most of northern Europe was shut down — no airplanes in or out! Flights were ultimately canceled for the following five days. Therefore, with a few other stranded visitors like myself, we experimented and tried out new restaurants every day until we could leave. It was a very interesting time!

R&I: What is the riskiest activity you ever engaged in?

I am originally from Canada, and I played ice hockey from the time I was four years old up until quite recently. Too many surgeries sadly forced my recent retirement.

R&I: What do your friends and family think you do?

That’s a funny one … I am a CPA working in the casino industry, doing insurance and risk management, so neighbors and acquaintances think I either do tax returns or they think I’m a blackjack dealer at the casino!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]