The dismantling of war risk insurance takes time, despite the Deep Blue project from NIMASA – Businessamlive
TThe recent outcry by the Nigeria Maritime Administration and Safety Agency (NIMASA) against the rising premium for war risk insurance being levied on ships sailing to Nigeria, despite the decline in piracy in Nigerian waters and the Gulf of Guinea since February when the Integrated National Die Infrastructure for the Protection of Safety and Waterways known as the Deep Blue Project, known as the Deep Blue Project, has caused disagreement among industry experts, although the shipping industry regulator and the Nigerian government for their efforts to contain attacks in the region give praise, but the expected changes in premium would take some time to reflect.
Adekunle Segun, an expert on the maritime industry, indicated in a statement to Business am that the war risk insurance reduction will not come like a switch and said the barrage of attacks must practically fall before the war risk premium can be effectively lowered.
“The Deep Blue Sea project is a step in the right direction, but premium payment is a business factor and the wave of attacks has to be reduced in practice before the war risk premium can be effectively lowered,” he said in a statement to Business on
In early June, Nigeria officially launched the Deep Blue project, with equipment valued at US $ 195 million, consisting of airplanes, boats and vehicles, to ensure safety in line with its primary objective, including Nigerian waters along the Gulf of Mexico Securing and strengthening Guinea as well as the country’s oil infrastructure with a coordinated combination of land, sea and air forces. This is as data from the International Maritime Bureau shows that in 2020, 95 percent of the 135 seafarers seized worldwide were abducted in the Gulf, in 22 different incidents involving hostages usually brought to Nigeria where ransom is being negotiated.
Because of this high tendency towards criminal activity in the region, global insurance companies like Beazley are now offering a policy called “Gulf of Guinea Piracy Plus” to compensate for illegal ship seizures and crew hijackings in the absence of ransom demands, as an insurance plan for seafarers traveling through travel the area. Because of the high risk, the insurer limits the claims to $ 25 million as the premiums for this type of coverage are decided on a case-by-case basis.
For example, Beazley Insurance, in cooperation with Maritime Asset Security and Training (MAST) Limited, offers the “Gulf of Gunea Piracy Plus” in addition to normal Hull and Cargo insurance to cover the illegal seizure of a ship and the hijacking of crews. In the event of an illegal seizure, the cover helps to compensate for the loss of the ship and its cargo, while at the same time enabling the ship, cargo and crew to be returned quickly and safely. While the limit for this type of product Is $ 15 million, Combined War and Piracy Insurance (Gulf of Guinea Piracy Plus in conjunction with our War Insurance) has a fully combined policy with limits of up to $ 75 million.
The Nigerian Maritime Security Unit (MSU) of the Deep Blue project is structured to consist of personnel from the Nigerian Navy, the Nigerian Army, the Nigerian Air Force, the Nigerian Police and the Department of State Services who conduct simulation exercises on a regular basis.
In addition, the Nigerian shipping industry would deploy 16 armored vehicles for coastal patrols, two special mission ships, 17 fast interceptor boats, two special mission aircraft to monitor the country’s exclusive economic zone (EEZ), three special mission helicopters for search and rescue operations, as well as four unmanned aerial vehicles in addition to the 600 specially trained ones Soldiers of the maritime security unit.
Bashir Jamoh, director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), said at the launch that deploying the assets of the Deep Blue project means another layer of national security, one that encompasses overall maritime safety and better domain awareness use some of the latest technology. In his opinion, the efforts will give Nigerians more leverage to harness the vast resources of their maritime environment and promote economic diversification.
While Nigeria’s efforts have received national and international praise, some industry experts believe that more efforts should be made to reduce piracy levels in order to reduce or remove the premium for war risk insurance.
Through Kitack Lim, Secretary General of the International Maritime Organization (IMO), the United Nations (UN) praised the efforts in the fight against piracy and armed robbery in the maritime area of the Gulf of Guinea. In his opinion, the move is an important global development to prevent piracy in the region. She noted, however, that more work needs to be done to ensure the success of the goal of increasing security in the Gulf of Guinea.
Commenting on the matter, Neil Roberts, Head of Marine and Aviation at the London-based Lloyd’s Market Association, said: “Recent efforts are not enough to fill crew, owners or insurers with confidence. This is encouraging, of course, but it cannot be said be safe “in response to NIMASA’s Director General, Bashir Jamoh, calling on the international shipping community to reconsider the issue.
“There is an increased risk to ships and crews and until this is clearly eliminated Nigeria will remain a listed area,” added Roberts.
Adekunle Segun provided further clarification on the type of insurance, noting that war risk insurance, or premium, is a type of supplementary insurance in the aviation or marine insurance business that is normally collected during transit or delivery of cargo to high risk areas where there is a very high risk likely occurrence of war, such as piracy, hijacking, or attack on ships and cargoes.
“We must praise our government for this achievement and initiative. The number of kidnappings, piracy and robberies has increased in the Gulf of Guinea. Nigeria has one of its maritime strengths in the Gulf of Guinea (GOG) so this project will really help contain these incidents. Such facilities will greatly reduce, if not eradicate, attacks on our waters, ”said Segun.
When asked about a steady increase in premiums despite plans to curb piracy, he replied that it was necessary to monitor the effectiveness of this equipment and this project over a period of time, since the attack should actually be carried out and practically reduce the insurance companies to get them to see this before the premiums can be mitigated.
“What should make us all happy is the fact that the project is already underway. However, there are some stages that need to be done before we can enjoy the result.
“Insurers need to see the effectiveness of this project on the ship by reducing the number of successful piracy attacks. If they see that, we shouldn’t have to push for the reduction; they will significantly reduce it on their own, ”Segun continued.