NNPC insurance: Brokers to spend about N0.8m on bidding

From left: President Nigerian Council of Registered Insurance Brokers(NCRIB),  Ayodapo Shoderu; the Iyaloja of Lagos State, Mrs Folashade Tinubu-Ojo; Deputy President  of NCRIB,   Kayode Okunoren and Mrs Ekeoma Ezeibe, a Board Member of the NCRIB, during the visit of NCRIB President to the Iyaloja in Lagos.

Chuks Udo Okonta

Brokers seeking this year’s insurance business of the Nigerian National Petroleum Corporation (NNPC) will spend about N800, 000 on certifications and other requirements to qualify, Inspen has learnt.

It was gathered that the high profiled bid which will close by January 17, has set many brokers who have not been able to meet the tough requirements running around putting their papers together.

A broker who pleaded not to be named, said to partake in NNPC’s insurance business, a broker, has to spend about N800, 000, adding that brokers are asked yearly to do several types of certifications which cost them up to the said amount.

The broker noted that it is worrisome that having incurred such fabulous expenses, only few brokers are considered for the business.

It would be recalled that last year, only 45 brokers were considered for the $71 million business out of the several that put in their applications.

The Broker said “Honestly, in the area of oil and gas, the Nigerian Content Policy made provision for local operators to be trained, so that the business could be handed over to us. But what the oil and gas operators are doing is contrary to what is expected.

"What they are asking for was never envisaged when the law was provided. The NNPC is really putting more demand on brokers. We are worried because we thought we would acquire more knowledge as we grow in the business, but reverse is the case.

"We have undertaking oil and gas training at home and abroad, but with the restrain by the oil and gas operators, we can never put to test what we learnt. With the things they are asking for, only few brokers can qualify for the business. If they are doing it intentionally, where do we then put the local content law?" the broker said.   

The broker said operators were supposed to be trained so that the foreigners would hand over the businesses to them, adding that if the operators are not given the practical training and exposure, how they would learn.

"The oil and gas operators have been unfair, but we will continue to strive until we get there. The first time they did it we had 34 brokers engaged, the next one we had 14 and last year 45. We thought there would be continuous increase yearly.

"It is unfair to the local content law. The local content law is there to protect us and put food on our table, but the way they are asking for some many things, it is really disturbing. We will continue to strive to meet their demands.

"Honestly, the brokers are complaining. They are not happy about it, most of them have paid so much to certified many documents. Corporate Affairs Commission (CAC) gave us certification, but NNPC still want us to certify it. And they would give us short period within which they want us to implement these things," the source maintained.

NNPC insurance business over the years has been clouded with controversy, as the premium has been on the increase since 2001, when Jardin Lloyd Thompson (JLT) reinsurance brokers, United Kingdom, and YOA insurance brokers, its Nigerian representatives, took over its insurance. It raised concern in 2010 when the premium jumped to over $74.5 million from the $53.5 million that was paid in 2009. It again increased to over $75 million in 2011.

The premium was brought down last year to $71 million from the $86 million paid on the Consolidated Oil Programme (CIP) in 2012, through the effort of Leverage Insurance Brokers, assisted by Hogg Robinson Insurance Brokers and Ark Insurance Brokers, who negotiated the renewal and secured the reduction in rate