By Godfrey Bivbere

Former Director General of the Nigerian Maritime Administration and Safety Agency, NIMASA, Temisan Omasteye, has described the war risk insurance, WRI, and premium slammed on cargoes coming to Nigeria as the biggest scam in the world.

War risk premium is a term used in describing exorbitant freight insurance charges on ship cargoes, especially those to be delivered to regions exposed to piracy or war.

Delivering a lecture at the fifth edition of the Taiwo Afolabi Annual Maritime, TAAM, Conference at the University of Lagos, UNILAG, Omatseye noted that there has not been any record of claims over crystallized risk in the years since the commencement of collection by international insurance companies.

According to him, “War risk premium is not only fraudulent and criminal in nature but is the biggest fraud in the world. When I was the Director-General of the Nigerian Maritime Administration and Safety Agency, NIMASA, the leadership of Nigeria Liquified Natural Gas, NLNG; approached me to complain about this war risk premium because it was too high.

At that time, Nigeria was paying about $400 million annually for this insurance but there were no recorded claims to validate this insurance premium.

“Some people just sit in Lloyd’s of London and the Joint War Risk Committee to collect these monies. Yet, at that time the rates levied on Nigeria was about four times the rates charged on vessels going to war-torn Afghanistan.”

According to him, the WRI is an invisible charge that was built into the cost of shipping as all imported goods had to pay for this premium.