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Underwriters, banks target N270 billion premium from 45m cargoes


Cargoes coming from other countries to Nigeria Source : Google

Insurers urge customs to search for importers with fake policy
To further deepen insurance penetration in the nation’s economy in the country, insurers, the banking sector and other relevant stakeholders are in talks on how underwriters can realise additional N270 billion yearly premium income from importations at the gateway.

An analysis by The Guardian showed that if the proposed plan materialises, it will ensure that about 45 million cargoes coming into the country through Nigeria’s seaports on yearly basis have genuine marine cargo insurance certificates.

Cargo insurance, a type of marine insurance, is underwritten on the Institute Cargo Clauses, with coverage on an A, B, or C basis, with A having the widest cover and C the most restricted.

With marine cargo insurance not part of the compulsory insurances, importers have been negligent about insuring their cargoes, with sources in insurance sector putting the number of cargoes with genuine insurance coverage at about 40 per cent of the entire cargo throughput entering the ports yearly.


This leaves 60 per cent, translating to about 27 million cargoes that were either not insured or parading fake insurance certificates, as racketeers flood seaports and major centres where shipping activities are carried out, thereby making billions of Naira yearly from their shady deals.

And with the Customs relaxed on checking insurance certificates, importers were only procuring insurance cover when they felt it was necessary.

The Nigerian Ports Authority (NPA) had earlier disclosed that 45.1 million cargo throughput came into the country’s seaports in 2018, while 43 million cargo throughput were recorded in 2016 and 2017 respectively.

The Guardian gathered that cargo insurance is classified into three categories- ICC ‘A’, which has the most risk covered, while ICC ‘B’ and ICC ‘C’ have less insurance coverage. An importer is expected to choose the one best suits the purpose.

Although, there is no fixed premium for marine cargo insurance, as the price is determined by some factors, mainly the worth of the goods in a cargo, findings showed that the least valued cargo is worth N5 million. The insurer demands 0.2 per cent of the N5million, translating to N10,000 premium per cargo.

This means insurance companies in the country continue to lose approximately a minimum of N270 billion from non-purchase of original cargo insurance certificates for 27 million cargoes.

Moreover, some cargoes are worth more, hence, the insurance industry could be losing more than the estimated N270 billion per annum.

For years, the existence of fake marine insurance in the maritime sector is giving insurance operators sleepless nights, while non-insurance of some cargoes by importers remains a challenge for revenue generation of insurance companies.

Investigations also show that the fake insurers issue fake marine certificates to customers at major centres where shipping activities are carried out across the country.

Further findings reveal that one can get a fake Insurance Cargo Clause ( ICC) “C” marine insurance cover, which is the minimum marine cover, for N2,500 notwithstanding the Insurance value.

It was learnt that most of these fake certificates bear the names and logos of registered insurance companies, even though these insurers knew nothing about these dirty deals, others use fake names to cajole the unsuspecting importers, as these policies were being sold at a cheap price.

But all these are expected to change with the launch of the new platform that would ensure no cargo carries fake insurance or remain uninsured.

To realise this ambition, insurance companies, under the auspices of the Nigerian Insurers Association (NIA), are already working on a unified platform, specifically for marine insurance cover.

The platform, when operational, will be the only platform to which Customs will be using to check the genuineness of any marine insurance certificates, including cargo insurance.

The new platform is also expected to link several relevant platforms, such as that of the Central Bank of Nigeria and Customs, thereby, increasing the premium income of the Nigerian insurance industry as well as the contribution of the sector to the nation’s Gross Domestic Product (GDP).

While market observers see this as good ideas, because racketeers are reaping from where they did not sow, they expect improvement in business inflow from the marine sector just as the Nigerian Insurance Industry Database (NIID) platform leads to increase in purchase of genuine motor insurance certificates.

When questioned by The Guardian on the development, the Director-General, NIA, Mrs. Yetunde Ilori, re-echoed the association’s efforts at exploring CBN-coordinated platform, which also includes Customs, banks and other stakeholders in the marine business generally to boost the sale of genuine marine insurance covers.


She disclosed that a new platform had been developed specifically for this purpose, even as Customs would be using this platform to ascertain the genuineness of any marine insurance certificate, thereby leading to rapid rise in the sale of marine insurance policies.

According to her, “A platform has been developed, just like we have for Motor now, and it is going to be compulsory that Customs would be checking marine policies through the platform. Once we propose and the banks and every stakeholder buy into it, we will launch.

“The industry is not getting much from marine insurance business now because it is not compulsory and nobody is checking it, but when this platform becomes operational; the banks, where importers get their Form M, and Customs are using it, marine insurance uptake will grow since various agencies are now involved in enforcement.”

Explained the reason for fake insurance at Nigerian ports, the Past Commissioner for Insurance, Alhaji Mohammed Kari, had, during his tenure, said the Customs still has problems with marine insurance.

Most of the insurance covers that are taken to cover imports into Nigeria, according to him, are expected to be insured by Nigerian insurance operators, but unfortunately, the Customs Service does not have the facility to identify fake insurances.


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