It is (or should be) government policy to never pay a ransom, otherwise they'd be setting a precedent and we'll be paying constantly. That's what K&R insurance is for. Sure, it's expensive, but if you're going somewhere unsafe, then it's worth the money, wouldn't you say? Admittedly, no-one would expect Somalian pirates as far south as Tanzania, but it's not that far south and they have been known to come down as far as Mozambique.
I'm not unsympathetic, but one of the reasons this is so rife in the area is that it is obviously a working business model. People are paying and so the game continues. If this were my loved ones, I'd be trying to raise the money to free them as well.
Juice