P&I Mutuals work effectively to protect shipowners in the maritime industry
A P&I Mutual Association is a type of marine insurance company providing Protection and Indemnity (hence, “P&I”) insurance to shipowners and operators. P&I liability insurance covers shipowners' and operators' legal and financial liabilities arising from their use of the vessel.
P&I Mutuals are distinguished from other insurance entities by their member ownership – typically consisting of shipowners, charterers, and ship management companies, also known as operators. The members pool resources to cover potential liabilities and then share the risks and rewards of the insurance business. Some member benefits of P&I Mutuals include lower insurance costs, claims handling, personalized service, and a strong focus on risk management.
Several international bodies regulate P&I Mutuals, including the International Group of P&I Clubs, a group of thirteen P&I Mutuals that collectively insure around 90% of the world's ocean-going tonnage.
What is a Protection & Indemnity (P&I) Mutual Association?
While you know a local P&I Mutual will generate significant benefits in Nigeria, the vast knowledge required can be confusing and all-consuming.
- You are distressed that insurance premiums are going offshore, preventing the transfer of skills, knowledge, expertise, and employment that would generate enormous economic benefits and support growth within Nigeria.
- You are tired of the status quo of rising costs without proper benefits, lack of representation in the decision-making, and inability to drive outcomes locally.
- You lack confidence that any locally-based organization has the breadth of expertise to handle all required activities.
- You are frustrated because you know you need sufficient data to make informed decisions, there’s nowhere to go for it, and you don’t know how to find it.
Potential Transformation offered by a Nigerian P&I Association.
- The local sector comes together to pool its insurance-buying needs while maximizing coverage and collective negotiating leverage.
- A return of ownership, control, and decision-making authority to onshore (local) parties with a vested interest in seeing benefits kept within the country.
- Provision of a locally-based, affordable, and robust solution that retains any profits generated for the sole benefit of its local members.
- Access to recognized professionals via outsourcing to management professionals well-versed in the needs of Nigerian business owners.
- Retention of millions – and potentially billions – of dollars spent on premiums paid to offshore entities.
- Development and retention of skills, knowledge, expertise, and employment generate enormous economic benefits and support growth in Nigeria.
- Establishing a Nigerian P&I Mutual supports The Nigerian Oil and Gas Industry Content Development Act of 2010’s goal to increase Nigerian participation in their most strategic Industry. S.50 of the Act states, “No Insurance risk in the Nigerian oil and gas industry shall be placed offshore without the written approval of the National Insurance Commission which shall ensure that Nigerian local capacity has been fully exhausted.”