The nation’s insurance industry has commenced moves to block leakages in marine business, through which the sector is losing billions of naira on fake marine certificates, BusinessDay investigations have revealed.
Consequently, it has rolled out a pilot scheme on marine business, under the Nigerian Insurance Industry Database (NIID) through which banks financing imports and Customs inspecting marine cargoes can verify the genuineness of their insurance certificates.
While it is said that the NIID, a project of the Nigerian Insurers Association (NAI) would become more visible and ready for launch in the second quarter 2015, companies in the industry are already keying in for e-marine with installation of new software.
Marine business contributes over 12 percent of the industry’s annual total premium, amounting to about N35.4 billion, as at the end of the 2012 financial year.
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Gus Wiggle, chairman, Nigerian Insurers Association (NIA) told BusinessDay that the industry is at the point of reducing to the barest minimum, losses to fake marine insurance certificates. Wiggle further said that, “With NIID, now we are certain we can block some of the leakages.”
Wiggle who is also the managing director/CEO of Linkage Assurance plc stated that ,”With the level of success being made in motor third party insurance with NIID, I have no doubt that we are going to achieve same with marine business.
He added, “The pilot scheme is being test-run and by the time it is perfected, we will formalise it with the Banks and Customs, and it will become difficult for anyone to present a fake certificate and succeed with it.
“As a Company, Linkage Assurance, we are already trying to do e-marine and some other establishments in the market are doing same, and we believe that is the way to go if we must reduce the incidence of fake operators in that area of the business.”
Seye Odukogbe, chairman, Marine Officers Committee of the NIA said a major problem facing the industry in marine business is the incidence of fake certificates, and this is worsened when the importation did not pass through bank financing.
“If it was financed by banks, definitely banks will ask that the importers bring genuine insurance certificates from any of the National Insurance Commission (NAICOM) registered insurance companies. But because some of them have not passed through the banks, they come with any kind of paper as insurance certificate, and that is one of our problems,” Odukogbe said.
According to him, “beyond the NIID which is being championed by the insurance industry, we are trying to ensure that Customs reject certificates that were written by hand.
Rotimi Fashola, group managing director, Industrial & General Insurance, speaking to insurance brokers recently, on how the market can be improved, said there is need to activate the various laws relating to Marine Insurance of refined petroleum products imported into the country.
“The Insurance Act 2003, for instance, provides that all imports into the country must be insured with an insurance company registered in Nigeria. This law is only observed in the breach, Fashola stated.
Nigeria’s Marine Insurance Act defines marine insurance a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure.
A contract of marine insurance may, by its express terms, or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage.
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