Insurers underwrite 40% of $1bn oil, gas risks

Wiggle

Chuks Udo Okonta

Insurers are presently underwriting only 40 per cent (N64 billion) of the over $1 billion oil and gas risks in the country, leaving a whopping 60 per cent about N96 billion to foreign insurers yearly.

Efforts by underwriters and brokers to revise this ugly trend over the years have not yielded positive results as oil and gas insurance pools proposed to compete with the foreign underwriters were unable to takeoff due to technical hitches.

Chairman Nigerian Insurers Association (NIA) Godwin Wiggle, who is worried about this huge loss to the industry, said Nigeria has the comparative advantage in the production of Oil and Gas, adding that the association under his leadership, will fast track the process of re- establishing the Oil & Gas Insurance Pool so that the industry can reap the full benefit of the Nigerian Local Content Development Act.

Commissioner for insurance Fola Daniel, said  the Nigerian Local Content Development Act,  has moved Insurance companies capacity to underwrite local risks to 40 per cent, the
He noted that prior to the enactment of the law; the industry was underwriting about three per cent of local risks.

Daniel said the law has paved the way for underwriters to engage in special risks, which were ceded abroad in the past

He said insurers are presently doing well in oil and gas risks, adding that tremendous growth has also been recorded on aviation risks.

He stressed that the operators are also careful about the level of their involvement in high profile risks, stressing that they only take a bite of what they can chow.

“The Nigerian insurance sector has great potentials for massive growth. The population, if adequately harnessed, gives an added advantage to the industry to further develop its market,” he said.