War Risk Premium on Nigerian Shipments to Persist Despite Security Gains, Says NIMASA DG
Despite notable improvements in maritime security across Nigeria, multinational shipping companies continue to impose a war risk premium on vessels visiting the country, a situation that has raised concerns within the Nigerian maritime sector.
The Nigerian Maritime Administration and Safety Agency (NIMASA) attributes this persistent premium to the influence of a cartel within international insurance companies.
NIMASA Director-General, Dr. Dayo Mobereola, stated that the war risk premium is not reflective of the current security conditions but is instead maintained by a group of insurers profiting from the existing arrangement.
He expressed frustration that these premiums, which significantly inflate the cost of freight for both imports and exports, are being kept high despite the enhanced security measures in Nigeria’s waters.
“The premiums are being artificially sustained by insurers who are fully aware of the improved security situation but prefer to maintain elevated charges to maximize profits,” Dr. Mobereola said.
He stressed that the issue extends beyond Nigeria’s capacity to resolve alone and highlighted the need for a coordinated international effort to address the entrenched interests that perpetuate the war risk premium.
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In response to this challenge, NIMASA has initiated discussions with key international partners and is seeking to bring the matter to the attention of the United Nations.
The agency hopes that with the backing of the UN and other global stakeholders, Nigeria can effectively challenge the insurance companies and compel them to adjust the premiums to reflect the actual risk level in the region.
The war risk premium has been a long-standing issue for Nigeria, and NIMASA’s efforts to engage international maritime organizations represent a crucial step in the ongoing fight to reduce these unnecessary costs imposed on the nation’s shipping industry.
