FG seeks insurance sector’s support to de-risk blue economy

Global marine insurance to reach $45.2b by 2032

The Federal Government said a viable insurance sector is needed to address the risks linked with Nigeria’s blue economy and realise the sector’s potential.

This, the Minister of Marine and Blue Economy, Adegboyega Oyetola, said at the 2024 National Insurance Brokers and Exhibition tagged, ‘Insurance and Blue Economy: Connecting the knots’.

The minister said that as of 2023, the global marine insurance market was valued at $33.9 billion and projected to reach $45.2 billion by 2032, growing at 3.2 per cent yearly.
He said the growth is driven by the increased volume of international trade, the rise in the frequency and severity of natural disasters as well as the growing need for comprehensive coverage due to geopolitical tensions.

Oyetola stressed the need for insurance to play a vital role in the blue economy space ensuring risk mitigation covering traditional maritime risks like hull and cargo damage, liability and piracy.

He also said insurance can address emerging risks like sea-level rise, extreme weather events and ocean acidification while protecting investments in innovative technologies.

“Considering the potential of the blue economy to serve as a significant driver of economic growth and sustainable development, it is exposed to various risks from public and private contracts, tariffs, local and international regulations, natural disasters and climate change,” Oyetola said.

The minister observed that insurance plays an important role in creating a good enabling environment for investments by increasing investors’ confidence.
He said by insuring against risk in the maritime space, the sector could attract investment, facilitating access to finance for sustainable ocean-based projects and incentivising sustainable practices that offer lower premiums to businesses with strong environmental and social performance.

“Marine insurance is a type of insurance that covers losses or damages incurred on sea or inland waterways. It provides financial protection for ships, cargo and other property involved in maritime trade,” he said.

According to Oyetola, marine insurance is an indispensable tool for the shipping industry, as it provides financial protection against a wide range of risks. He said that marine insurance ensures the smooth operation of global trade by mitigating potential losses and liabilities.

The minister emphasised the role of the sector in Nigeria’s overall economic landscape, saying the marine insurance subsector is a significant part of the global market.

The President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Babatunde Oguntade, called for national recognition of the insurance sector as no country can develop unless it appreciates insurance as the bedrock of economic growth.