d
,lr/f,EIVESS SElUIl92m
ON
Tf,f, UANTTTTB
SECIUnTT
OF Tf,f,
Supptlcf, r
tip. J. o. soDolryalE
NTANIGJNG
D]RI:JCI
C]R
GE]V
INSUMNCE
EROKERS
LIMITED
lf,lms.5" - Illl. G" If,ll.2OO.1

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MARINE INSURANCE AGATNST TERRORIST
. RELATf,D LOSSES
It is .stinded tbrt los6 rssocilted witb the s.ptenber t I
2001 attsck cotrld total about $50b
In th. walc oftbe,tEcL tsroristr.l ed acb hrr. continuert
to rttruct thr ,h.ntion of the iNunng pnblic ad ihe idrurert
lnsurer! {g.er thrt thi! is probrbly the siqlc lary.st lots eYer
rButriry lron I single evert rithin r 2+totrr p.riod. Los of
life w$ als rppallingly bigt
There rs *orld{idc condenmtion of lhe 6d cw s of thtt
d!y, The ulprecedenteil shor of rupport for the enb tled
lone super power w$ overyhelnhe.
The econoEic,
socill Nd political dLct of srch a lo$ is still
Llt ke.nly in n.ny plr& of lbe norld tofty
Irsudce !s a lool fo. filk nmtgeoert ,nd risl l.rNfer l$
bcetr tu lh. front lift in th€ eliorts to coobar tle nMace of
lerrcrism in mor€ than one vry

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Fi.stly the FiDncill senices indusry of rhich insnnfte is .
nljor pilhr has tuen . prine tr.gct of te.rorists' acts. At thc
srne tinre insunde tds to providc p.otection to otber 8€as oI
the ecoDony
exposed
to t[6e att{ckr.
TERRORISM AND N{{RJNT INSUTLT]\\CE
Marine insurrncc
in Frricnlrr feeb the dlt.t of, sluggish
recoYery of ihe globll c.onony s vrluble resources
a.e
dive(ed from productiyc acdriric! to codbit tt.ro.isn. There
is a knock{n efied on the deD.nd lbr sne ty[6 of goods.
t)ena.d for shipping is al|o aficctcd,
Marine iNur.nc€ like otler clasrd of nrsurrnce
rely otr rhc
abiIry to a$6s md n@sur. rhe f.equency
ud $verjly or loss
in order lo pr.dict ib occnrence in tb€ future ther.by daking
it po$iblc
to approp.iit€ly rrte.nd pric€ the rkk
Hoseyer, the e.nts of 11' Septmh€r have denonstrrtcd tbat
it h imposible to qumiily or predict th..vct
forn Nnd
dirre oI ftrture tcrrorist acts,

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A Noflcgi.n shipping industry stndy drcw ,ltenlion to thc
foloring po$ible treas of terrorist tttlcls. Defore Septenber
11 sooe of iltes€ sccmriot would h.ve sccd€d tur-Ielched'
POTENTIdL 1II,ARITIMtr
SECTJRTTY
RISKS
'Ih. bijackirg' bonbidg or HDning of cruisc sbip6,
wrBbios! or ships carryilg flano,ble or h,z,rdons
Tbc running lg.oMd of shiF itr bighlv populelcd
w,r.rrro.l !res! bri.lges.
hieblt viribl. or svdboli'
lado,rk
or burdoN h.iliri6 qu.h.q tru(lerr
Tbe sinkine of sbipq in trtrrcs coodercirl cbtnn.h ro
block vitsl inports smb xt oil,
lle
import.lion
of biologidl,
bactenobgical or
rldiologi(rl
in orgo cotrlcioeB to lrrger
"elpo.s
contdn€r t rnintls lnd i rnd storag€ and dttribution
'the i iltr.tior of t.rrorists on boad ships or imide
Attac!. to offshor€ inst{Ittiotr.

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NTCIRIA
II 4 RII!IN!U&$!EIA.8
IEBBQ8!lM
Th€ question
has bcen .sked ts lo lhe need
for Nigeri' io be
inlolved itr tlte on going ciTorrs to conbat terrorisn_ tbe
inpression is giv€n thlt onlv the irdlstrirli4il
testertr
countries traci terrorist att ntiotr.
Receni .xperictrce has shown th,l this imPresson B *r!
wrong! tt. followitrg poinis aft sttung idlicltion th{t Nigerit
sbould bc rt coft€rned about t dorisf 'c15 $ lny other n'tion
highty indn ritlizcd o. not.
Nigerb is the siltb ltrg€st dporter oI crude oil in $e
!o.ld and h the nosr pop ous ^fridn
Ndtion The
por.trli.l fur nischietin rhis c'r(umsr'nce
ctnnol erune
tbeattentiorof hlrdeftd tedorists.
'l he bombing of the American Enb'ssiec in Kenvt and
T{nmni! show thtl tte front line can be sflitcb'd to rtry
count y .t will by the leroris$.
> The itrcessrd tltd.k
and *ia'e
of ofl-dhore
inqhll.lioN. chip! rnd p.rsoooel
of rbe oil comptniP\\
in
the Nig€. Delt! are &rN of t€r.or thich r'quire fim 'nd

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crrcfut nanrCeBcot
lo,void itsder.lopnrtrt betotrd
tbr
cudent level or coltly skirnbhes.
'| he 'eponed incrcdr in $. iocidence
ol piruc) wirbitr
NigerirD tc..itorirl e eru'
Tte rec.nt mtbdow.l
oI t&
risk cover Ior v6s'ls
t.rding to Nigeriu t.r.itori{l {d.rs
> Ih. very r.cent encoudt€r betw..n the Nig'rdn ArEv
rd sone Isltnic fuddtncDlalisls ihtt so bv the nan' 01
{ALIBAN" in Yobe Strte.
> The fact thtt . lrey oenber oI lbe
n{lqagl'"
o.grnization {8 eresled in Nigerit slortlv dter the
Sept.dber 1l bomhirys. Thir inditidual vas handed
over
to the US ,trtborirics lnd hts n!d'
very usPfrl
> lr i! pertaps rclsrnt to r€call lhrt Nig"it
ras
specif@ttJ oertioned bv the fugilrvc Alqa€da h's'
Osana Bin Lrd.n in . r.pe rele$cit to jourralist in 2003
as oft of rhc counr.i.s qherc he elpects tis folorers 1'
ri$ up .trd p.osctrtt t Jihrd 4ainst w6tcn rt'r€sh'
>'lh. onims implicltions
ofthe an6t in the nrst Donth
of 2004
of tn b.nirtr tourist' srcrerlv
floing dtior
buildir$ in Abuja shoulil tlso b. t nltter of concern
10

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> Fortunttely ihe B.litssi P€niNuls is bei.g ftslvtd i! a
nsntrcr, which secns to recognize
rhe €scntial nir or
delicaio diplonlcy ud ptd.tr.e that {e itrhereDt in tl'e
'I
RIJSPOI]SE O TE E PRODLtrM
Hlving higltligbted sone of the very senous
lhr€
3 posed
bv
tenorilr aciinri$ ii is essctrtill lo qdnire tt.ir efi'ct rnd tte
response
of the vsiou! p$tres to the ihre s
r&ed wiih probl.n of incrersd lols froD a lronn pe'il or 'n
irfoducrion of a tcw peril tn€ underuriter Nullv rctches tor
hb usurl tools, thlt is rbk nanlgeneot tnd lds preY€nti'n'
fn.se eorl well in a situltiotr Pier€ lhe loss, which n.y nsutr
{ron the o.curencc of the peril, tu metsurabr€ lto
prcilictabl€. cl€8ly
t .roritt &ttrck ilo nol fsll into this
Thc conseqftnce
oI this lack of drtr mL.s it neces$rv for ihe
und.rflriter to erclude
or 3.rerel) rcsmfl curer lbr rrrroriso
by lttrcning very strict cldles rt rercw.l.

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This is ce.taidy *hrt tunspired ,l tbe rc iftunDcc rdsrl
ncgoliarions
for nost itrsdMce comptni.s
.t the end of 20111.
Many iNureB w.rc not .ble to gtt d€qmte
rcinsnHnce
backi4 for rerrorist .!posur$ for their nrjot clienls'
crp.cially thGe cngtge'l io the oil indNiry. Tlb stro.i.ge of
.ci$urince cov€r forcd insuruce .!tes in mct c.ses to rise
'lhc blrk€t hu €njoyed th$. high ntes tbr {bout two verrs
rutrdng. Hopefully und.frriters {otrld lind th. &@s.ry
good scds. tn{t rcsN. io ndtrtatu the pricing leY'l for
M A RI N E INSTJRA
NCE AND TtrRRORISTS RIS I{S
Non-n,rin. insunne €rclld.
{d riNk isur.nce fron ih€ir
coie6. Ilo*cver, by proYiditrg coven for slrilcs, riots and ciYil
connotion; *ordirgs usd tsily inco.ponte insnrdnce for

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Utrlit reccndy
term.ist,.t! tr.s not ! signilica peril in the
risk proiilc of portfotic ln cons.que!.e, hlrdlv anv atlentior
{{r pdd ro rn. bonibnng of tccuEnlatioD
o{ ritk
Itr oany iNtances tbe ftk tas providod
dn@t for fr€t helore
rb€ evenh
of scPrenber
11,
M.rine insuanc. sinil.rly cxcludesYr.
riskiftumnc" rroo
'Ih€ risk is writrm b.ck itrto tbe sane poli.v for ctrgo
insura.c. at o dditiontl prenirn. Ior Hull ltuumnces
t
separate
war rislr policx is ced for the purpse
The writs-btk ef€ctitcly netm thti @vcr for t€rronsn r
t€rrorisn rel ed risls lre provided in ihe D&ine insnrrnce
d.rket As per tbe terns of lbe wrterbor!. agreedent these
pcriL Nre
corerc'l
theD lhe tubjrcl matur otlh. insuran'e
i'
1n the c$. of c.rgo r& risk conluues for , period of 15 drvs
Iron did night of the ,nivll oI tbe c,rrying vdfl whilst the
crgo is on bmrd ruch
v6s€1.
Wher. the clrgo tu dbchtrg.d at tn itrt€rnediate pori cover
renrirs in tbrcc foi 15 dtys fron tb. dtle oI frivd
of the
ovd se$ vc*el
sucb u idt€rDeilidte port or pl.ce or {bilst

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'
itr t.dsit tt $ch interDediate pl$e or po for tbe purpo* of
By *.iting b&ck rhc slr risk coveng€ Dtrine insucd have
included
t.rorisd $ a peril.
Also by proriding cover for strikes, riors And cMl codnotiotr.
The policy tlso covc6 terrorisn rcl ed p€rils
In marin. c go cov.rs, hsrit c C.Ieo Clds€s B. ,nd c'
itrcorporde tu tbeir cltuse 4.7 (Exclusio6) "D€lib.r.te d.nnge
qcldsior" vbich red$
Itr no c$e sh,ll thb insumnc. cover-
Deliberrte dadtge to or d€lib.rtte de6tructioD
of tl. rtrbject
nalt r insured or lry ptrt th.r.of by the w.ongful tct of tuv
lius .is[ du€ to drlicious tcts, vrnddisn ,nd lrbotqe, Nll of
*hich rrc tdrorbt relrted rbt& tre ctluded.

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tto{der, {or I !ddi$6ut prdiuD iht institl$ Malidols
Drnage Cl.dsc l/8/82
cu bei4ortomted in tbe cov.r to buy
ln g.nerd ho{e!er, the notr - n.ride Darker h.s bcetr qur(e.
in rdrrtcting rhe brcith of cover provid€d tor te.ro.ilt retited
risks. The mrrine nlrter ir stos€r ro rc.ct
For in(.occ rhe trotr rrrine b{rtfl hr{ cuD0 oul $it[
clrues €lcluding risk poftd by dirty boDbs (crud€ -honc
e.de" Dlclei. bonbs) cyber lnd bi@heDi€l att clll. Tts6e
are pe.ik whose
consequencs
@n b€ so indisc.ininare rhar tlr
potenrirl for qgr€gatior i! rirrurfiy iDposribtc ro undeturiie
The blrine m&i€r hopefuly *ill soon rrke a cue,
RNOUNED ACTION
MrnDe insurcrs r€cogni2e tcrorisn
an eyer-pr€s€rt
"s
risli iD t[€ nadtine industry evd befo.€ Seprcnber ll.
As lir back a6 1985 tb€ [ijactr of thc lritim li&r ..Aclile
Lrnro ' sea€d to lldertift
rhe efr.crc of refuorisD otr n€
ntritine busi@$ $pecidly c.uise lh.r& The recent bonDDg
of a fuuy lde! [re@h ktrler MT .Linburg" in y€n€ni
waters
rdse the posibitity ihlr ships
nighr rciuany b. uwo as

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werpotu of t.ror nuch lite lirphncs *ere used otr l*pt nber
1l
The r€$ rko pcrsbts of th. '"Trojan Honc ' Conbiner lil€d
{itn bonbs oprble of being renor€ty dctonded lt destrmiior.
l$urers rorldwide $e qnicl to ddit the n€ed for a b.ord
f.ont in the {r
agaiNt t rror rtrd also 'n lhe provirioD of
The need lor i.ternrfonally coordinated
s.Iety n4suns snch
{s the ISPS code, ybich b th€ foc.l Doint ol this rcnidr,
Qntrot be oYeremphrsized.
lD the war agaitrst l.rorisb t cbtir is only ,s srong .s its
rroD r rhk n,nrg.nent poiot of view, 3ll p,rtis itrvoleed
in
the tran.it of thc c.rgo rre inport.nt. The rolq oI Shipper,
the
fomsditrg ag.4 ihc Sbip o{ner, Port! Altbority, Ctrstobs,
Clc,riry rgenl inl$d t ilstDrter {nd lbe receiver
ore dl
given due coNid.ration.
The need 10 emurs that port llfety ,nd security proccdu.s
m stard dized ud nnivc*dly enforced is ley to the
.chicvenent of rhe gods
A reserrch ..pon isurd by the Nonegiu Ship owft.s
.slociation on th€ nrtt€r bighlighted
the followiry rrcas:
.
Inprovddpolcingoflhe.orstrlurten

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.
D€l'$ Anil Dbruption:
' Ttisisverynuchevidetrtin
thelirlineblsiness
The med lo chdk cotrtritrc.s ad otber c&go unifi Bay
resultitrdelays
if notprooerlyh. led
lec&gliJ4
The deaih toll fron Septedber llvrs over 3000 .Sde..l
Fople qere itrjuftd
L!!!s4is4
Lenglhy hsslilr
my resdl qg.ieved permn6 nry s*
itrdiriduaft tud orgatriations cotrsidered
li.ble lbr their plighr.
Insu.ru $ o€nrion.d €rrtier !r€ tu th€ lrotrt lim of tbe rar
Hoseyer the fact rendN thar s sht€d €&li€r
the oc.ufence
,trd seteriry
olsuch ,ck are nol predicuble.
\\ererrb.lis tbr
financi.l cons.quenc.s
of ftpert d ,cts could be cippling to
Th€ Nigeri!tr insumne na*et is by hw required 10 provid.
covff for ,ll itr bound orgo
In rddiiion lhe cabotage
Act con4 into operdror
in Mry .tt i3
€xp4ted that tbc Sbip building &nd Sbip Acquidition fund
under $e Act should
trigger .tr incr.is in the runber or
tonn.ge lnder Nigeri.n lleg

---

I
The Nigeriar nrjne iDsurnre ildurlry rould Foude cover
6r lnii 'i'crelses ope.lting Lrgdy in the restive
Nigcr I'elas
As strted e.rlier ttere tu !o rer$n to believe
or hop. thrt the
irk ol tenonsn js renob frob Nigeri..
GOYERNMENT
INIER!'DNTION IN IIIE PRO'ITSTON
OF
PROTECTION
FOR TDRROR
RNLATDD A(]TS
Many counifi€s frced *ith the rolities or rhe p.spect or
tenorist ltttck
hrye btil to desig{ governmeri brcked
schenes
in qhich governbert
md tle i'xurue itrdu$.y .ct
togefher to provide rhe necess.ry
insunnce protcctiotr for t,!e
For esnple in tbt UK th. thrert of IR ,tllck !$ultcd itr
tht fo.drtion of (pool rq stich b , co.sortirn of Lloydr atrd
iDsurlnce conpuiB [be direct insuren pry tcrorist .elrted
lo$ !p to 4100,000.00
rny suD in .lcers of rhb b prid by pool
.e The gov€rnn€
nrteffenes
*hen (pool re) is hpp€d
Isnel opdrtes r sinilar sclcn.
Rccentty
the USA cotrg.css
approvcd
Iutrding for gorertrnent
b&[€d reinsumnc. frcilitJ for te.rofis! rchted loss€s lo thc
tu€ ofSl00bTh€ Gern.n parlirbent
has.pprcyed,
sun of
rbour S20b for tbe srne plrpdc. urdotrbt dt] tbert b Deed
for Nig€riln insurcrs ro b€grn the troc€s of puttiry n
governnctri-brclcd scncnc itr llrce mw

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InDedirte dialogu€ should heei. bertfen rbe vi.ious .pe!
bodies su.[ ,s rhe Nigerian Insurers Asci.rion (NIA) the
Nrtiond In!!mnc. Conaision (NAICOM) togcrh€r wirh
r*ponsiblc govemned organs sucb !s the Nigeriatr Meritin.
Autboriiy
NVA| n hich hrs r$potrsibilit'
forrhip!trprnisiotr
anil r.giltr.tion Tte C.rgo Defok Ftrtrd {CDF) of ihe
Nigeri.n SbippeB Cotrftil (NSC) the Nig€d$ Porb Authority
(NPA) a th€ i'eder.l Mitrilries orTronsporr and Fitr{n& io
wort out nodalitie lbr ! ror*lbte p@t $ntgenerr.
Ldier &d gendemen
thlnk you for yourunentiotr.
BY J. O. SOBO$AI-E

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