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Insurance Company funds a Private Navy ..

Discussion in 'General Yachting Discussion' started by colintraveller, May 15, 2012.

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  1. colintraveller, May 15, 2012
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    colintraveller

    colintraveller Senior Member

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    Private navy planned to counter pirate raids - The National


    A private navy costing US$70 million (Dh257m) is being set up to escort merchant ships through the pirate-infested Gulf of Aden.

    It will comprise a fleet of 18 ships, based in Djibouti, and will offer to convoy merchant vessels along the Internationally Recognised Transit Corridor (IRTC).

    This is the world's most dangerous shipping lane, between the Red Sea and the Arabian Sea. The fleet will be operated by the Convoy Escort Programme (CEP), a British company launched by the international shipping insurers Jardine Lloyd Thompson (JLT) and the Lloyds of London underwriters Ascot.

    Full funding will be in place by the end of next month, and the CEP hopes the fleet will be operational by December.

    "The shipping industry needs to stand up and be counted," said Angus Campbell, the CEP's chief executive and a former director of Overseas Shipholding Group, the world's second-biggest listed oil tanker company. "The time is now, not in four or five years' time."

    Piracy in the region is costing the global economy an estimated US$7 billion a year. For the ship owners alone, every vessel sailing through the waters off Somalia is charged additional insurance premiums of between $50,000 and $80,000.

    Ships opting to carry their own armed guards can be charged an additional $18,000 and $60,000 per voyage by security companies.

    Although the European Union is spending more than €8m (Dh37.94m) a year to maintain a naval force in the waters - EU NavFor - its warships still cannot provide close support to all merchant vessels.

    The CEP, however, offers substantial savings to owners as well as protection from pirate attack. The CEP will buy insurance and use that to cover the ships in its convoys, so owners will no longer need to pay premiums, or hire security.

    Instead, they will just pay a flat $30,000 to $40,000 per ship in the convoy.


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    It will be interesting to know the ROE for those vessels .. and those manning them can't be called or labelled "Privateers " . What will they be reffered as ?