The Nigerian Maritime Administration and Safety Agency (NIMASA) has intensified its campaign to eliminate war risk insurance (WRI) surcharges on Nigeria-bound cargoes, a move that could save the country an estimated $400 billion annually, according to the apex regulator’s Head of Public Relations, Osagie Edwards.
Edwards, argued that despite Nigeria’s significant investments in maritime security and its removal from piracy-prone lists, foreign insurers continue to impose hefty WRI premiums on vessels operating in the country.
War risk insurance is an additional surcharge imposed by global insurers on cargo destined for Nigeria. It includes war risk liability, which covers people and goods aboard vessels, and war risk hull, which insures the vessel itself. Initially introduced during the height of piracy and militancy in the Niger Delta, WRI has remained in place even after the country significantly improved its security landscape.
Over the past three years, according to Edwards, Nigeria has paid more than $1.5 billion to foreign insurance firms such as Lloyd’s of London and Protection and Indemnity (P&I) insurers.
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He detailed the cost implications are enormous: for a Very Large Crude Carrier (VLCC) valued at $130 million, the WRI surcharge per voyage reaches $445,000. For a newer container vessel worth $150 million, the fee climbs to $525,000 per voyage. Additionally, global shipping lines impose extra surcharges, such as Maersk’s $450 per container transit disruption charge, while others levy a war risk surcharge of $40–$50 per 20-foot container.
Despite the security improvements, he said, international insurers have refused to acknowledge Nigeria’s safer maritime environment.
“Nigeria has not recorded a single piracy incident in over three years. In 2021, the International Maritime Bureau (IMB) delisted the country from its piracy-prone nations. However, these unjustifiable premiums remain, costing Nigeria billions in avoidable expenses,” Edwards stated.
NIMASA, he explained, under the leadership of Dr Dayo Mobereola, has prioritised the removal of WRI premiums as part of its broader maritime reforms. The agency, in collaboration with the Nigerian Navy, has effectively eliminated piracy through the Deep Blue Project, making Nigeria’s waters some of the safest in the region.
The International Maritime Organisation (IMO) and other global bodies, Edwards affirmed, have recognised Nigeria’s efforts, with the International Bargaining Forum (IBF) also removing the country from its list of high-risk maritime zones in 2023. Yet, shipowners and insurers continue to impose high premiums.
According to NIMASA’s spokesperson: “The Nigerian government has heavily invested in maritime security, yet foreign firms continue to profit from outdated risk assessments. This must change.”
He revealed that in a bid to tackle this issue, Mobereola has engaged top international maritime stakeholders, including the Baltic and International Maritime Council (BIMCO), International Chamber of Shipping (ICS), INTERCARGO, and INTERTANKO. At a recent meeting with Chatham House’s Dr Alex Vines, discussions were held on escalating the issue to the United Nations.
Industry stakeholders have also voiced their perspectives on the matter. BIMCO’s Deputy Secretary General, Stinne Taiger Ivø, acknowledged Nigeria’s progress and urged shipowners to advocate for lower premiums. Similarly, Zhou Xianyong of INTERCARGO expressed support for Nigeria’s removal from war risk insurance premium zones, emphasising that shipping companies must reassess their risk evaluations in light of Nigeria’s improved maritime security.
However, some industry experts argue that insurers operate based on complex risk assessments that factor in broader geopolitical and economic conditions beyond piracy statistics alone. A senior executive from a leading global shipping company, who spoke on condition of anonymity, noted that while Nigeria has made commendable strides in maritime security, insurers remain cautious due to concerns about regional instability and operational risks in the Gulf of Guinea.
Additionally, NIMASA recently met with a Danish delegation led by Kristin Skov-Spilling from the Danish Ministry of Foreign Affairs, seeking Denmark’s backing in lobbying global insurers, according to Edwards. While some argue that Denmark cannot intervene in private insurance matters, the apex regulator believes otherwise, given that Maersk Line responsible for over 15 per cent of Denmark’s GDP plays a major role in these surcharges.
“If Denmark pressures Maersk, other shipping companies will follow,” Edwards remarked.
The NIMASA PR head further argued that the reduction of WRI premiums is crucial for the country’s global trade competitiveness, foreign investment appeal, and overall maritime industry growth. By eliminating these unnecessary costs, he maintained, Nigeria stands to save $400 billion annually while strengthening its position as a leading blue economy player.
As he puts it: “Nigeria has fulfilled its security obligations. The global shipping community must now do its part by removing these excessive premiums. We cannot continue paying war risk insurance indefinitely. The time for change is now.”
