Maritime Bulletin: The prospects of local marine insurance policies


Recently, the insurance of goods dispatched from the country of origin to the country of destination has come to the forefront of contemporary social and political issues. Marine insurance applies to all models of transportation of goods and compulsory in many export trade contracts.

On a more technical perspective, marine insurance is a contract whereby, for a consideration stipulated to be paid by a party interested in a ship or cargo that is subject to marine navigation processes, another part to the contract undertakes to indemnify against some or all of those risk at a certain period or voyage. Intuitively, the need for insurance goes beyond contractual obligations, and there may exist several valid arguments for buying it before dispatching the export cargo. Arguably, being the oldest form of insurance, the institution of general average, under which participants in marine ventures indemnify losses incurred, may itself be considered a primitive form of self-insurance.

In Ghana, the concept of marine insurance primarily considered a risk transfer mechanism against future unknown losses has not gained widespread media attention. Arguably, some insurance companies decide against marine insurance because the calculated risk involved is sometimes immeasurable. Hitherto, such risks are duly encountered when sailing ships are sent off on ‘hazardous’ sea voyages to trade without any form of financial compensation. The numerous risks involved in marine insurance (theft or damage to goods or property, loss or damage to hull, loss or damage to ship vessels, cargo etc.), informed the Insurance Awareness Coordinating Group (IACG) to expedite awareness on marine insurance to trigger discussions that could boost the awareness and fortunes of Ghana’s marine insurance.

Irrespective of the several marine insurance awareness programs organized, some international traders are of the view that marine insurance from Ghanaian insurers is unattractive. To woo the purchase of marine insurance policies from the trading public, appealing policies are required for players in the maritime industry from Ghanaian insurers. The question that arises here is ‘Do Ghanaian insurers have the required capital to cover the frequent nature of some or all marine losses?

The Government of Ghana (GOG), upon realizing the challenges facing marine insurers, has rolled out an initiative to ensure that all cargo to and from its origin is insured with a local insurance company. This policy initiative dubbed ‘Marine Cargo Insurance Protocol’ emanated the memorandum of understanding (MoU) among the Ghana Revenue Authority (GRA), Ghana Shippers Authority (GSA), and the National Insurance Commission (NIC) to offer a boost on both revenue mobilization and insurance penetration. This policy, if properly organized and managed has the tendency of reducing foreign exchange repatriation to overseas marine insurers.

The Centre for International Maritime Affairs (CIMAG) take on local cargo insurance 

Marine insurance, although lucrative is the least explored form of insurance for Ghanaian international traders and maritime industry players in general. This renders marine activities and properties of traders somehow virtually untouched. The enactment of the Marine Cargo Insurance Protocol would help open up that lucrative aspect to many international traders as well as the local insurance industry which in turn could help translate into higher earnings for companies that would invest in marine insurance deals.

From an economic perspective, the Marine Cargo Insurance Protocol if properly managed has numerous reasons for optimism. The recent favorable economic backdrop coupled with Ghana’s middle-income status would help boost marine insurance purchases (according to CIMAG’s recent 2021report on marine insurance). The latent local marine insurance purchase market potential requires capitalization which would see a 12% significant boost (according to CIMAG’s recent 2021report on marine insurance) in the purchase of local marine insurance. Such a massive boost will provide a potential add-in effect on the overall economic development of Ghana.

ALBERT Fiatui is the Executive Director of CIMAG, maritime industry expert, LLB in law and

BISMARK Ameyaw (PhD): Energy economist, CIMAG’s board member, Climate change activist 

NB: For the full report, contact Mr Albert Derrick Fiatui. Email: [email protected]

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