Jamoh launches campaign to end war risk insurance on shipments to Nigeria
Amid the decline in the incidence of piracy in Nigerian waters and the Gulf of Guinea since February, when the Nigerian Maritime Administration and Security Agency (NIMASA) deployed the Integrated Security Infrastructure National Waterways Protection and Protection Agency, known as the Deep Blue Project, the Managing Director of Nigerian Maritime Administration and Security Agency (NIMASA), Dr Bashir Jamoh expressed concern over the continued insurance against the risks of war on cargoes bound for Nigeria, calling for its abolition.
This came as it was revealed that Nigeria’s maritime trade is at risk, to say the least, due to the increase in war risk insurance premiums currently being paid by ships bound for Nigeria.
Although, according to Dr Jamoh, piracy in Nigerian waters is on the decline, industry stakeholders fear that offshore underwriting companies still insist that very high premiums be paid by those transporting cargo to the United States. Nigeria.
War risk insurance is a type of insurance that covers damage due to acts of war, including invasion, insurgency, rebellion, and hijacking. Some policies also cover damage from weapons of mass destruction. It is most often used in the shipping and aviation industries.
It generally has two components: civil liability for war risks, which covers people and objects inside the machine and is calculated according to the amount of compensation; and War Risk Hull, which covers the craft itself and is calculated based on the value of the craft. The premium varies according to the expected stability of the countries to which the ship will travel, the phenomenon of war risk, which was only known to countries with a high rate of piracy such as Somalia, has also entered Nigeria following the massive involvement of young people in the Niger Delta in militant activities.
Speaking at the recent official launch of Project Deep Blue in Lagos by President Muhammadu Buhari, Dr Bashir said: “Since the deployment of Project Deep Blue assets in February, there has been a steady decline in hacker attacks. in Nigerian waters. on a monthly basis. “
“We therefore invite the international maritime community to rethink the issue of insurance against war risks on goods destined for our ports. Nigeria has shown sufficient commitment to tackling maritime insecurity to avoid such a burden, ”Jamoh said.
According to the 2020 nonprofit Oceans Beyond Piracy reports, the total cost of additional bounties for war risk zones incurred by vessels bound for Nigeria transiting through the Gulf was $ 55.5 million alone. in 2020, and 35% of ships transiting the area were also covered by additional kidnapping and ransom insurance totaling $ 100.7 million.
Insecurity became so severe in the region prior to the deployment of Project Deep Blue that global insurance company Beazley is now offering ‘Gulf of Guinea Piracy Plus’, a tailor-made insurance plan for maritime crews traveling in the region. .
The plan provides compensation for illegal ship seizures and crew kidnappings, even in the absence of ransom demands. It tracks insured vessels around the clock, but because the risks are so high, it limits claims to $ 25 million.
A spokesperson for Beazley revealed that the premiums for this type of coverage are decided on a case-by-case basis, however, because the risks are so great.