Modelling marine accidents economic loss and the compensation in Nigeria
Date
2021-12
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Federal University of Technology, Owerri
Abstract
The aim of the study was to develop models of empirical relationships and elasticity coefficients that will serve as strategic tools for ensuring that, marine underwriters reserve adequate funds to maintain financial solvency for ensuring timely, adequate and sustainable compensation of marine accidents economic loss, for all kinds of insured marine risks, in Nigeria. The study used triangulation design method and obtained time series data on annual marine damage accidents economic costs, compensation funds reserved for insured marine risks, death and injury marine accidents, values of seaborne trade exposed to perils of the sea and per capita output, from the Nigerian Insurers Association (NIA), Central Bank of Nigeria (CBN) Statistical Reports, and Department of Petroleum Resources (DPR) offshore oil and gas incidents Reports. Questionnaire was used as survey instrument to obtain primary data on externalities costs to third party operators affected by marine oil spill accidents impacts on the marine ecosystem. The multiple regression method was used to model the relationships between the dependent and independent variables while the Log-Log constant elasticity model was used to establish the respective coefficients of elasticity. The Gross Output Model (GOM) was used to quantify the output losses occasioned by death cum injury marine accidents, for compensation purposes, while the Willingness to Accept (WTA) method of the Contingent Valuation Method (CVM) was used to evaluate the externalities costs and output losses to third party operators affected by marine accidents ecosystem damages, for purposes of providing adequate levels of compensation funds for indemnification of insured marine risks. It was found that, there exists significant relationships between shipping accidents economic loss and value of seaborne trade. The elasticity of shipping accidents economic loss to growth in value of seaborne trade over the period covered in the study shows that it was inelastic (E<1). The coefficient of elasticity of offshore O&G damage accidents economic loss to growth in maritime trade is 2.376. The mean economic costs of death and injury marine accidents to be compensated by underwriters per annum over the period is 4797662.92USD and 279181.17USD respectively with respective average rates of change of 1399708.27USD and -29587.88USD. The result also shows that, the Mean Willingness to Accept Amount (MWTA) which indicates the externalities cost of marine accidents damages to each third party operator affected by oil spill accidents and which underwriters are to provide adequate compensation is: N1,629,610 per annum per capita. The study developed the following models of relationship as contribution to knowledge: SHALt = 2430145.277 + 0.34IMPSTRADEt + 0.051EXPSTRADEt + e; and OFFALt = 123404.891 + 0.321IMPSTRADEt + 0.121EXPSTRADEt + e. InMAPREt = 11.021 + 0.364InSHALt + e; and InOGREt = 16.879 + 0.037InOFFALt + e. COMPENpercapital≥N1629610[1+ r] n ; and MPENaggegate≥N1629610[Xn][1 + r n. Also: ∆MAPREdeath≥1399708.265USD. It was recommended that compensation funds reserved by underwriters for indemnification of insured unexpired marine risks must increase proportionately in line with growth in value of seaborne trade exposed to sea perils and maritime accidents economic loss, indicated by the elasticity and rate of change coefficients.
Description
This thesis is for the award of Doctor of Philosophy (Ph.D) Degree in Maritime Management Technology
Keywords
Marine, accidents, economic-loss, compensation, Nigeria, Department of Marine Management Technology
Citation
Nwokedi, T. C. (2021). Modelling marine accidents economic loss and the compensation in Nigeria (Unpublished Doctoral Thesis). Federal University of Technology, Owerri, Nigeria