Up to approximately two years ago, pirates operating in the Gulf of Guinea used to take control of commercial vessels transiting in the area and commence Ship To Ship transfer of cargo. Consequently, the cargo was sold in the market for an illegal income. Nowadays, Nigerian pirates have discovered that it is more cost effective and less time consuming to kidnap crew members. Logistic operations are much simpler because there is no need to provide a supply vessel to unload cargo as well as transiting same to an area controlled by the same gang and thus avoiding increased government check points and rival gangs. On average it takes less than a month to secure crew ransom payments as opposed to several months to dispose the illegally possessed cargo. Nigerian pirates exhibited increased capabilities and tactics sophistication by taking control of a joint task force ship late August 2017.

Nigeria is a listed area according to JWLA022 dd 10/December/2015 and subject to an Additional Premium (AP) from War Underwriters. Normally, for transits in the Gulf of Aden and Indian Ocean, War underwriters would provide a significant discount for having a Kidnap & Ransom (K&R) cover in place containing a waiver of subrogation and an armed team of guards on board the vessel. Unfortunately, these favorable War AP discounts for the assureds are not normally applicable for transits in the Gulf of Guinea. In view of the increased pirate activity, sophistication and pirates target differentiation (from cargo to crew) in the Gulf of Guinea, it will be a benefit for the shipping community as a whole to adapt to current circumstances. Ideally, War underwriters would provide similar economic incentives for ships calling Gulf of Guinea as in the Gulf of Aden and Indian Ocean. In our opinion, the outcome could in this instance be that K&R underwriters will be involved more often offering most valuable guidance, expert advice and comprehensive coverage. Authorities should allow highly trained and certified armed guard teams to board vessels calling ports in the Gulf of Guinea. War underwriters will also benefit because they will be liable for some K&R risks above the upper limit of liability of K&R policy due to the waiver of subrogation. Ship managers and Owners may also enjoy in the long run more competitive terms from War and K&R underwriters as well as armed guard companies due to a booming sector with less claims.