Insurers Advised on How to Underwrite Marine Risks
Insurance
By Nnamdi Duru
Operators in the Nigerian insurance industry have been asked to brace up for the challenges posed by marine business to ensure effective underwriting of risks associated with marine business in the country. The Central Bank of Nigeria (CBN) and other relevant stakeholders were also asked to prevail on foreign ship owners to honour guarantees emanating from the Nigerian insurance industry.
The insurance industry was presented the above challenges at a recent one-day seminar on "Cargo Defence Fund and Risks not Covered by the Regular Insurance Market" just as Nigerian Insurers' Association (NIA), the umbrella body of insurance companies pledged its readiness to ensure sanity and professionalism in marine insurance business in the country.
Rising from the seminar, participants asked CBN and other stakeholders to prevail on ship owners to honour guarantees issued by Nigerian insurance companies.
The participants resolved that "NIA, Nigerian Shippers Council (NSC) and the Cargo Defence Fund should meet with CBN to prevail on foreign ship owners to accept guarantees provided by Nigerian underwriters".
They also insisted that underwriters must earn the confidence of the global marine insurance market while taking proactive actions to ensure effective underwriting of risks emanating from marine business in the country and beyond.
"Nigerian marine insurers should meet up with their obligations in general average losses so as to restore confidence in them by the international marine insurance market.
"NIA should take proactive measures towards effective marine underwriting and become familiar with the laws and procedures for trade in Nigeria through survey/inspection of marine insurance risks and to get a good understanding of the claims settlement procedures of other foreign countries", the participants advised.
In order to maintain sanity in shipping and to ensure compliance with the country's shipping classification clause, NIA was asked to discourage its members from charging additional premium to allow shippers use unclassified vessels as a cost cutting measure.
The industry was also told to avail itself of the opportunity provided by the Automated System of Customs Data Analysis (ASYCUDA) to guard against circulation of fake marine insurance documents in the country. This they advised should be in addition to having a clear understanding of appropriate covers available in marine business, particularly the Institute Cargo Clauses A, B and C.
The participants as well underscored the need for the Nigerian insurance industry to underwrite the Cargo Defence Fund Token Insurance Cover for the benefit of importers and exporters. They also called for the establishment and joint administration of a maritime bank while shippers were asked to avoid patronising touts while being security conscious, trying to ensure speedy coverage of their business risks.
Importers and exporters were in turn advised to exercise due diligence and to deal with only credible and reputable partners as well as seek professional advice from the NSC and the Cargo Defence Fund even as the fund seeks to assist them with coverage of risks associated with their business.
Meanwhile, the Director-General of the association, Mr. Ezekiel Chiejina in his address at the seminar pledged that the industry would pursue measures aimed at bringing about sanity in the marine insurance sector. This he said, would be achieved through collaboration with relevant government agencies, including the National Insurance Commission (NAICOM).
|
