Shippers, insurers fear Somali piracy may escalate

* Growing worries for shipping routes due to Somali piracy

* Consumer supplies could be disrupted

By Jonathan Saul

LONDON, June 29 (Reuters) - Pirate attacks on vessels sailing off Somalia could get worse, pushing up insurance and shipping costs and possibly forcing companies to use longer sea routes, industry officials say.

Piracy has flourished in recent months off the busy Gulf of Aden and Indian Ocean shipping lanes and seaborne gangs have seized several cargo ships and collected tens of millions of dollars in ransom for the safe release of crews and cargoes.

Last week the Group of Eight powers said it was "seriously concerned" about the increasing threat.

"(The) piracy risk is likely to get worse before it gets better," said a report this month commissioned by Lloyd's of London [LOL.UL], the specialist insurance market.

While foreign navies have been deployed off Somalia since the turn of the year to try to prevent attacks, those forces have found themselves stretched given the vast expanses of water involved leaving vessels vulnerable to attack.

"It's quite difficult to find vessels that will go through the Gulf of Aden these days," said a London-based shipbroker.

Marine insurance brokers said insurers were charging between 0.05 percent to 0.175 percent of the value of a ship per voyage in the Gulf of Aden versus zero to 0.05 percent in May 2008.

"Rates and charges may well escalate if the number of successful piracy attacks increases," said Paul Newton, head of hull and yacht underwriting in Britain with insurer Allianz Global Corporate & Speciality.

CONSUMER GOODS

While poorer weather has hampered pirate attacks of late, the lure of ransom money will ensure Somali gangs remain fully active when conditions improve, analysts say. Maersk Line, the world's largest container shipper owned by Danish shipping and oil group A.P. Moller-Maersk (MAERSKb.CO), said it had put an emergency surcharge in December on all cargo transiting the Gulf of Aden, which it said would contribute to the additional costs including crew risk compensation.

Nearly 20,000 ships pass through the Gulf of Aden each year, heading to and from the Suez canal.