NU Online News Service,Jan. 18, 12:34 p.m. EST

For the fourth straight year the number ofpirate attacks against ships has risen, withhijackings off the coast of Somalia accounting for 92 percent ofall ship seizures, according to the International Maritime Bureau(IMB).

More than 635 hostages were being held forransom as of Dec. 31, 2010, the IMB’s global piracy reportedsaid.

James M. Craig, president of the AmericanInstitute of Marine Underwriters, said he has not heard anythingnew from members on the issue for several reasons—one being thistype of information is often considered proprietary.

Secondly, he said, the American market does notwrite a lot of “blue water hull,” or coverage for ocean-goingvessels that would include ransom payments. Ransoms paid to Somalipirates increased to an average of $5.4 million in 2010 compared toan average of $150,000 in 2005, according to nonprofit think tankOne Earth Future.

Much of the hull coverage is written by theLondon, Norwegian and Japanese markets, Mr. Craig added.

“Very—underline very—few U.S. companies getinvolved with the actual hull,” Mr. Craig said. Some U.S.-basedcompanies do write coverage for the cargo on seized ships, buteven then “you have to be very careful not to violate U.S. laws andsanctions” when paying a claim, he added.

Insurers have to go through the Office ofForeign Assets Control (OFAC) of the U.S. Department of theTreasury, which administers and enforces economic and tradesanctions.

One Earth Future, which said it is committed toseeking effective solutions to emerging governance challenges, putthe cost of piracy in 2010 at about $7 billion to $12 billion.Insurance premiums were between $460 million and $3.2 billion ofthe cost, the foundation said. A majority of the total cost isdriven by the piracy off the coast of Somalia.

In total, 445 ships reported attacks in 2010,up 10 percent from 2009, the IMB said. Hostages are on a rapidrise. About 1,180 crew members were taken hostage in 2010 comparedto 188 in 2006.

Somali pirates are also traveling farther toattack, reaching as far south as the Mozambique Channel, which is“unprecedented,” said the IMB.

Captain Pottengal Mukundan, director of IMB’sPiracy Reporting Centre, said the increase in attacks is“alarming.” He said pirates are now overpowering fishing andmerchant vessels to use in attacks on other unsuspecting ships.

“There is a desperate need for a stableinfrastructure in [South Central Somalia],” said Mr. Mukundan, whocalled on the United Nations to develop “workable administrativeinfrastructures” to prevent attacks.