The Irene SL’s cargo of Kuwaiti crude oil represents nearly 20% (one fifth) of total U.S. daily crude oil imports. This one cargo is 12% of all oil coming out of the Middle East Gulf each day, and 5% of total daily world seaborne oil supply.
"Underwriters are paying far more attention to the security measures taken by owners. We can negotiate a discount off the price of financial protection against attacks by Somali pirates for those measures being put in place."
The most widely used on-board defenses against piracy include razor wire and so-called citadels - secure rooms with communications equipment into which crew members can retreat while remaining in control of the vessel until naval forces arrive.
Ship owners typically buy marine kidnap and ransom cover in the Lloyd's of London market, insuring themselves against the cost of raising and delivering multi-million dollar ransom payments.insurers are likely to step up their demands that ships operating in pirate-infested waters take physical precautions against attacks. Hiscox is the biggest provider of marine K and R in the Lloyd's market. In 2006 Hiscox plc moved its country of domicile from the United Kingdom to Bermuda, adopting the new name Hiscox Ltd
Insurers are reluctant to disclose the size of marine K and R premiums or claims for fear that pirates will use the information to set their ransom demands, with any increase potentially setting off an inflationary spiral.
Prices initially rose strongly in the face of strong demand before levelling off last year because of increased competition as more insurers entered the market, attracted by the bumper profits on offer.
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