Following an increase in kidnap for ransom attacks in the Gulf of Guinea beyond Nigeria’s economic zone, the Joint War Committee has redrawn the listed extended risk area in the West Africa region, marking an increase in vessel insurance premiums.
The Joint War Committee (JWC), including underwriters from the Lloyd’s and International Underwriting Association companies markets, has expanded its Gulf of Guinea listed area further south and east following an uptick in piracy attacks.
The JWC’s listed area was last changed in 2013 and previously covered only the exclusive economic zones of Togo, Benin and Nigeria north of latitude 3° north. The area now extends between Lome, Togo (6° 6′ N, 01° 12′ E) to a point (0° 40′ S, 03° 00′ E), about 340 nautical miles west of Cape Lopez, Gabon in the south (0° 40′ S, 08° 42′ E).
Attacks in the extended JWC area increased from five in 2017 to 28 in 2019, with 10 of the incidents last year reported as kidnappings, says Dryad Global’s analyst, Shannon McSkimming.
Incidents in the revised area would have made up 30% of all incidents in the JWC West Africa region, had it been implemented last year. The trend that we’ve seen emerging since 2017 coexists alongside a lack of incident reporting in the Indian Ocean. This raises significant questions over the timeliness and responsiveness of the JWC in responding to the evolving nature of the risk and in turn the perceived heightened risk across the region,
…she stresses.
Meanwhile, a change in the Listed Area allows underwriters to charge more to cover vessels that travel through the region because shipowners who are required to sail in the Gulf of Guinea will have to obtain the approval of their insurer before they can enter these waters, maritime security firm Dryad Global informs.
Additional premiums (AP’s) have increased in 2020 due to a proliferation of piracy in West Coast Africa in both the Marine War and Kidnap and Ransom market, noted Chris Goddard, underwriter of Marine War risks with Vessel Protect.
The expansion of the Gulf of Guinea notification area is in direct response to the broadening of sustained attacks in the region which began increasing in 2019. The JWC’s decision will increase costs for shipowners operating in the region,
…he added.
However, those who widely adopt best management practice and engage in risk mitigation measures such as transit risk assessments conducted by independent maritime security experts will continue to see preferable insurance terms over their peers.
The BMP- West Africa (Best Management Practices to Deter Piracy and Enhance Maritime Security off the Coast of West Africa) was issued in late March 2020, amid a complex and dynamic maritime security situation in the region.
