Bloomberg News

Piracy Spurs Insurers to Extend Nigeria War-Risk Zone, Add Benin

August 04, 2011

Aug. 4 (Bloomberg) -- Marine insurers extended a war-risk zone for Nigeria, Africa’s largest oil producer, and included waters off neighboring Benin for the first time as piracy attacks increase.

The Joint War Committee, which represents Lloyd’s of London underwriters and other insurers, listed the areas as higher-risk for shipping on Aug. 1, Lloyd’s Market Association senior executive John Gurtenne said by phone. The Nigerian risk zone now extends to 200 nautical miles (230 miles) offshore.

The declaration lets underwriters charge an additional premium based on the value of ships entering the area, according to Gurtenne. Pirates attacked or tried to strike 10 vessels off Benin or in the Gulf of Guinea in June and July, based on reporting to the International Maritime Organization, the United Nations’ shipping agency.

Underwriters can already levy additional premiums on ships calling at Nigerian ports or offshore terminals, Gurtenne said. Piracy costs the global economy an estimated $7 billion to $12 billion a year, the IMO says. Large parts of the Indian Ocean, Arabian Sea, Gulf of Aden, Gulf of Oman and southern Red Sea are risk zones for piracy, according to the committee.

--Editors: Dan Weeks, Sharon Lindores.

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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