Knowledge is power – and when it comes to insurance in Africa, this couldn’t be more apt. “Many African countries insist on insurance being placed locally which limits options in terms of cover and insurance company used,” says Mike Brews, director of Horizon Underwriting Managers. “This can result in goods being detained or even confiscated if the required insurance documentation cannot be produced – and often results in the consignee or consignor being fined.” In Brews’ view all risk cover is vital in Africa because so many things can go wrong, “from damages due to loads shifting on the poor road system, to theft and hijackings of cargoes”. A case in point involved goods being confiscated at the border going into Angola as the insurance was not placed with a local Angolan insurer. “The consignee had to pay a substantial fine to get the goods released, on top of arranging a local insurer to insure the cargo (which was already insured so double cost) and some goods were pilfered while stopped.” Moving cargo into Africa is a risky business, which is why insurers are reluctant to cover goods unless certain prerequisites are in place. “While this varies from commodity to commodity, insurers may require escorts or pre-approved routes depending on the length of the voyage and commodity being shipped. “Political instability and poverty are often the root cause of many of the losses in African countries – from poor infrastructure to theft and pilferage of cargoes.
INSERT: All risk cover is vital in Africa because so many things can go wrong. – Mike Brews