War risk insurance: NIMASA makes case for Nigeria

The Director-General of the Nigerian Maritime Administration and Safety Agency, Dr Bashir Jamoh, has called on the international shipping community to rethink the issue of war risk insurance on Nigeria-bound cargoes. 

Jamoh disclosed this to newsmen in Lagos on Tuesday.

War risk insurance, a type of insurance common to the shipping and aviation sectors, covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking. 

It generally has two components: War Risk Liability, which covers people and items inside the craft and is calculated based on the indemnity amount; and War Risk Hull, which covers the craft itself and is calculated based on the value of the craft. The premium varies based on the expected stability of the countries to which the vessel will travel.

The war risk phenomenon, previously known with countries having high rate of piracy such as Somalia, found its way into Nigeria following massive involvement of youths in militant activities in the Niger Delta.Reacting to this, Jamoh, explained that since the deployment of Deep Blue project, piracy has declined.

“Since the deployment of the Deep Blue project assets in February, there has been a steady decline in piracy attacks in the Nigerian waters on monthly basis.

“We, therefore, invite the international shipping community to rethink the issue of war risk insurance on cargo bound for our ports. Nigeria has demonstrated enough commitment towards tackling maritime insecurity to avert such premium burden,” Jamoh said.

According to nonprofit organisation, Oceans Beyond Piracy’s 2020 reports, the total cost of additional war risk area premiums incurred by Nigeria-bound ships transiting the Gulf was $55.5m in 2020, and 35 per cent of ships transiting the area also carried additional kidnap and ransom insurance totaling $100.7m.

Anozie Egole
Anozie Egole
Anozie Egole is a Transport correspondent. He reports Maritime, Aviation and Rail/Road Transport for Financial Street.

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