Terrorism: Underwriters relocate base from troubled areas

Daniel

Chuks Udo Okonta

Though they operate to mitigate risks, some underwriters have shut down their offices located in areas where the activities of the dreaded insurgents - Boko Haram seem to be prevalence, Inspen has learnt.

The Managing Director of one of the underwriting firms that have shifted base, said the firm now runs the operations in affected areas from states that are a bit safe, adding that the decision was taken to secure the lives of its employees.

He also noted that the huge damages caused by the insurgents, has little or no impact on the firm’s claims payment, stressing that the insurgence has made operators to be careful about the risks they insure.

The operator said the impact on Islamic Insurance –Takaful which ought to popular in the area due to the population of Muslims in the region, is insignificant, an indication that most of the people in the affected areas are yet to embrace it.

Commissioner for Insurance Fola Daniel has advised underwriters not to run away from terrorism insurance, but evolve products to help mitigate risks associated with it.

He said: “Two years ago, some foreign multinationals began to add terrorism or kidnapping to their portfolio and Nigerian companies were not ready for it.

“This became an excuse for wanting to export 90 percent of such risk abroad. What we did at the commission was to call insurers and let them know that nothing is spectacular about kidnapping that you cannot have an endorsement that will enable you to introduce kidnapping to your portfolio and a few of the companies rose to the challenge and added it to their policies so there is no longer an excuse to take this business abroad.”

He believes the government can serve as reinsurers as is the case in Britain and the United States.

“We threw the challenge to the Nigeria Insurance Association (NIA) to start something, make noise, do write‐ups in the newspaper to let people know that we can do it but need government to augment and this is the case in Britain, it is the case in America and I’m sure the government will listen,” he added.

Having an insurance cover for terrorism in Nigeria may help reassure investors and business owners and eventually attract more economic stakeholders to Africa’s largest economy.

He lauded the efforts by Continent Reinsurance Plc to help absolve the risks through reinsurance product it has designed and urged underwriters to leverage such products to design their terrorism products