Rising piracy on Indian Ocean could raise insurance premiums, Kenya fears

Cases of piracy in the Indian Ocean off the Somalian coast increased in 2017, raising fears that sustained attacks could raise insurance and freight costs for Kenya importers. A recent report from the International Maritime Bureau (IMB) noted that nine piracy attacks were recorded off Somalia in 2017, up from two in 2016, even though global attacks dropped to a 22-year low. Rising piracy on Indian Ocean could lead to high insurance charges, IMB said

IMB director Pottengal Mukundan said that “the 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,”. The increase in such attacks usually comes with costs such as increased insurance premiums, longer freight routes as vessels avoid hot spots and the additional cost of hiring private armed guards.

Kenya’s Daily Nation noted that, “for a country that imports more than KES1.3trn worth of consumer and industrial goods, the increased cost is eventually passed to the consumer through higher retail prices.”