Global Security, Privacy, & Risk Management

Piracy Costs World Economy $12 Billion US August 12, 2011

It is no secret that maritime piracy is a growing problem.  Pirate attacks are increasing in violence and frequency and it is taking an economic toll.  In 2009 an estimated $177 million was paid in ransom to pirates and in 2010 the estimate is that ransoms had grown to $240 million.  According to the IMO there were 489 reports of attacks, armed robberies and attempted attacks in 2010.  This represented a 20% increase over 2009.  The increasing costs of insurance premiums, anti-piracy security and other aspects are estimated to have an overall impact to the world economy of between $7 and $12 billion US.  Adding to the challenges is the increasingly frequent attacks on the West Coast of Africa.  According to the IMO there were 18 reported attacks off the coast of Nigeria in the first half of 2011.  While the numbers don’t rival those of Somalia, it is suspected that many attacks go unreported as a larger percentage of ships are carrying illegal oil and other cargo.  London-based Lloyd’s Market Association, an umbrella group of insurers, earlier this month listed Nigeria, neighbouring Benin and nearby waters in the same risk category as Somalia.