Commissioner for Insurance Olorundare Sunday Thomas and Executive Secretary, Nigerian Shippers Council Hassan Bello after a meeting in Abuja to discuss areas of possible collaboration.
The National Insurance Commission (NAICOM) and the Nigeria Shippers Council (NSC) plans to collaborate to reduce the cost of doing business through the introduction of insurance cover on containers, and also looking into risk management at the various ports.
The Lagos Chamber of Commerce and Industry (LCCI), had complained of the high cost of doing business at the ports due to poor infrastructure, the multiplicity of levies, excessive regulations, among others, which were further worsened by the Covid-19 pandemic.
But the Executive Secretary, NSC, Hassan Bello, during a courtesy visit to the NAICOM management, Tuesday, stressed the need for a policy review of insurance covers for goods in transit, accidents, losses and damages, devoid of religious sentiments that everything happens for a reason that could be prevented.
He said the primary aim is to make Nigerian ports more competitive by reducing the cost of doing business, and one of the costs is insurance deposits that shippers pay for taking the containers out of the port.
For instance, shippers deposit N150,000 to N200,000 on containers for moving their goods from the port, while insurance cover would have been cheaper, and the impact on the prices of goods and services would be lower.
Bello said: “The containers are the assets of the shipping companies, and it is expected that the containers are returned in perfect condition. But unfortunately, most freight forwarders don’t get back the deposits because most times the containers are not in good conditions when they are returned, and even when returned in perfect condition, shippers don’t get their deposit back in good time.”
He, therefore, urged insurance companies to come in and ensure the containers are covered at a lower cost, to reduce some of the challenges faced by shippers, while working toward door-to-door delivery of cargoes.
Bello, however, said despite the pandemic, the Council was working with all other maritime agencies to look into digitalisation of ports processes to limit physical contact.
Responding, the Chief Executive Officer, NAICOM, Olorundare Sunday Thomas, said he has been looking forward to collaborating with NSC on making insurance more relevant in the maritime sector.
He commended the Council for its creative and developmental ideas that would deepen insurance in the maritime industry.
He said: “As far as I can remember, this will mark one of the few times that any of our stakeholders will come with developmental ideas that will enhance the thought of the Commission on how to deepen the market, and how to make insurance relevant to our daily living.”
“When it comes to trading, marine on its own is in the frontline, and insurance itself moves with trading. Insurance started with marine insurance largely before the fire, so marine is quite critical in the history of insurance development.
“It is important to note that what we are getting from the marine business is not consistent with transactions in the marine sector. In terms of contribution to insurance penetration, it is almost insignificant; but as an economy, we know that is not the true reflection of what is happening in the marine sector, and I am happy for your creative ideas.”
To this end, Thomas said the Commission would look into establishing a committee comprising both agencies, to determine how insurance can be factored into ports operations to reduce the cost of business.