War Risk Insurance – NIMASA expresses optimism

In June we reported that NIMASA had requested the international maritime community to remove, or reduce, war risk insurance on Nigeria bound cargos.

This week, the Director General of NIMASA, Dr. Bashir Jamoh, met with the Executive Secretary of the Nigerian Shippers’ Council (NSC), Hon. Emmanuel Jime, and stated that he believed the continued reduction in maritime incidents seen over the last few months should lead to the removal of the insurance premiums and in an official statement following the meeting he noted that “…the sharp decrease in maritime incidents logged in IMB’s second quarter report was a valuable feedback on the NIMASA’s campaign for Nigeria’s delisting from countries under the war risk insurance burden”.

With the initial statement on the subject from NIMASA in June, Lloyds List released a response soon after stating that there were currently no plans to amend this premium and at this time we await further international response to this latest statement from the DG of NIMASA.

Worth note is while the DG referred to the IMB Q2 report for 2021 piracy showing a decline in incidents compared to 2020, Q2-Q3 have historically shown a lower rate of incidents in Nigeria due to natural factors such as weather conditions etc. and thus the international community may well need to see evidence of a decline in piracy in Nigeria for at least the next 6 months before considering any re-classification.

The removal of this insurance would obviously have huge benefits to everyone involved in the maritime trade in Nigeria (according to the non-profit Oceans Beyond Piracy’s 2020 report, the total cost of additional war risk area premiums incurred by Nigeria-bound ships transiting the Gulf was $55.5m in 2020 alone.), however any removal will likely only be predicated upon a corresponding drop in the risk of pirate attack.  We will continue to monitor for further updates.

You can read more on the meeting and statement here – NIMASA anticipates end to War Risk Insurance