Nigeria continues losing approximately $500 million annually in war risk insurance premiums despite achieving three consecutive years without piracy incidents in its territorial waters.
The Sea and Empowerment Research Centre reveals that international shipping firms maintain war risk surcharges on vessels bound for Nigeria through the Gulf of Guinea, despite successful deployment of the Deep Blue Project, which has significantly enhanced maritime security. Over the past three years, these premiums have cost Nigeria over $1.5 billion.
“This represents a huge financial burden that does not reflect our current maritime reality,” stated Eugene Nweke, SEREC’s Head of Research. “Nigeria has not recorded a single piracy incident in three years, yet international insurers continue treating our waters as high-risk zones.”
War Risk Insurance typically covers two major components: War Risk Liability, which protects people and cargo aboard vessels, and War Risk Hull, which insures the vessel itself. These premiums were originally introduced to protect vessels navigating conflict-prone zones but remain in place despite risk mitigation.
The research center highlighted substantial opportunity costs associated with maintaining maritime security at such high financial input levels. While praising the Deep Blue Project’s effectiveness in eliminating piracy, SEREC noted that security-allocated funds could have been invested in critical sectors including port modernization, logistics infrastructure, or fisheries development.
“Imagine the impact if such investments had been redirected into the fishing industry or transport logistics—both vital to trade and food security,” the bulletin emphasized. This perspective raises questions about resource allocation efficiency in achieving maritime security objectives.
SEREC called for intensified diplomatic engagement with global insurance underwriters, urging comprehensive reassessment of Nigeria’s maritime risk profile aligned with current security realities. The group advocates for premium adjustments that reflect the country’s improved maritime safety record.
Regulatory agencies including the Nigerian Maritime Administration and Safety Agency and the Nigerian Shippers’ Council have launched campaigns aimed at scrapping war risk surcharges entirely. These agencies argue that Nigeria’s enhanced maritime safety should eliminate such levies, which inflate shipping costs and ultimately increase goods prices for consumers.
“Insurers must align their premiums with present-day realities in Nigerian waters,” SEREC insisted. “Security has drastically improved, yet we continue being economically punished for threats that no longer exist.”
The research center commended the Minister of Marine and Blue Economy for providing strategic leadership in sustaining the Deep Blue Project, which has earned Nigeria global recognition for maritime security improvements.
SEREC concluded that while zero piracy benefits including enhanced trade, increased investor confidence, and maritime stability outweigh associated security expenditure, immediate action is required to address financial exploitation through insurance premiums to unlock full economic value from maritime reforms.
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