Concern over large war insurance premium losses

Notwithstanding achieving a three-year milestone without a single piracy attack on vessels bound for Nigeria through the Gulf of Guinea, the country has lost over $1.5bn in ‘War Risk Insurance premiums’ to foreign insurers, reports The Nation. According to the Sea and Empowerment and Research Centre (Serec), the country pays an average of $500m annually in war risk surcharges imposed by international shipping firms, despite the successful deployment of the ‘Deep Blue Project’, which has significantly improved maritime security. ‘This is a huge financial burden that does not reflect our current maritime reality. Nigeria has not recorded a single piracy incident in three years, yet international insurers continue to treat our waters as high-risk. This must stop,’ Serec’s head of research, Eugene Nweke highlighted in the centre’s latest bulletin. The bulletin emphasised that War Risk Insurance, originally introduced to protect vessels navigating conflict-prone zones, remains in place long after the risk has been mitigated. It indicated the premium consists of two major components, including War Risk Liability, which insures the people and goods aboard the vessel, and War Risk Hull, which insures the vessel itself. It, however, noted the claim that eliminating these premiums could save Nigeria over $400bn annually seems to be an estimate of potential annual savings, rather than a direct calculation based on the $1.5bn paid over three years.

Full report in The Nation