Broker Aon says the recent lull in Gulf of Aden pirate attacks during monsoon season had prompted rates for kidnap and ransom cover to fall by around 30%.

The Seminar is set to hear the views of the Judge Advocate General Rear Admiral William D. Baumgartner on the piracy threat during Monday’s sessions and Aon says it has been advising it clients to look to o obtain their coverage before the weather in the Gulf of Aden allows the piracy gangs back onto the seas and with it hike the price of protection.

Clive Stoddart, head of Aon’s kidnap and ransom team, said: “We’re expecting a significant rise in piracy attacks when the south-western monsoon season ends. As such, insurance prices are likely to be on the cusp of turning upwards. Ship owners can benefit from fixing the cost of an annual or single transit kidnap and ransom policy now while rates are low. Underwriters are offering reduced premiums, up to 30%, for quick and unladen vessels – in other words, those that can more easily escape attack - but this will almost certainly be short lived.

“Ransom payments and the total expense of releasing a vessel from pirates can leave ship owners facing substantial expenses. Recovery of such sums under existing liability or hull insurance policies is subject to much uncertainty and can prove a lengthy process. Securing more appropriate insurance cover from the kidnap and ransom market will reimburse and cover reasonable costs.”

It comes as underwriters in Belgium at the annual meeting of the International Union of marine Insurance opened a debate about whether now was the time for the P&I sector to participate in the payment of the costs of ransom.

London Joint Hull and War Committees have publicly stated they are keen to see such a debate as the current case law over the liability for ransom indemnity dates back to the 16thcentury.