[Sherman Logan]

Pirates have attacked more than 100 ships off the Somali coast over the last year, reaping an estimated $1 million in ransom for each successful hijacking, according to analysts and country experts.

Here you see the economics of the situation. Each ship pays $20k to $30k in insurance, which is a good deal less than the cost of armed security.

The insurers rake in a total $400M to $600M, paying out $100M.

Economically, it makes sense to just buy the insurance and pay the ransom.

It also, of course, encourages more pirates to join in, so in the long run is not a viable strategy.

[Salgak]

But where’s the fun in THAT ??

Plus, as Kipling noted, once you pay the Danegeld, you never get rid of the Dane. . .