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More insurance firms in Nigeria to form oil and gas insurance pools
More insurance companies in the country will soon have the opportunity
of benefiting from the federal government's local content policy as it
relates to insurance as more oil and gas insurance pools are set to come
alive. Consequently, insurance companies have been advised to align
themselves with any of the pools as a sure way of gaining entry to the
exclusive club of oil and gas insurance underwriters.
Mr Fola Daniel, the nation's commissioner for insurance who gave the
advice in Lagos had regretted that the structure of the oil and gas
insurance is such that it is difficult for most insurance companies to
win accounts on stand alone basis. According to him, the demand for
consolidated accounts of companies as precondition for listing as
possible oil and gas underwriters is almost impossible for companies to
comply with hence the need to form consortiums.
The commissioner's challenge came on the heels of the declaration by the
membership of the Nigerian Energy Insurance Consortium that it does not
intend to operate as a cartel. Mr Olumide Falohun who gave the
explanation in Lagos had declared that the consortium was willing to
admit new members as long as they would be willing to conform to lay
down rules and regulations. According to him, no fewer than five
applications from insurance companies wishing to join the pool are
awaiting approval even as he had encouraged other companies to form
similar pools.
"In fact, we are encouraging other companies to form similar groups in
the sector. And I can tell you that I know of two similar groups though
they have not come out yet but they are doing something in that
direction. The Nigerian Energy Insurance consortium is the first
consortium in the country aside the ones formed outside the shores of
Nigeria", Mr Falohun had noted.
The Nigerian energy Insurance Consortium has such companies as Law Union
and Rock Insurance, Linkage Assurance, Niger Insurance, Insurance PHB,
International Energy Insurance and Equity assurance as members. The
United African Insurance Brokers (UAIB) acts as the manager.
But the commissioner for insurance had appealed to other insurance
companies which have oil and gas reinsurance treaties to form
consortiums with the view to bringing many more of the companies into
the business. Investigations conducted by Champion Insurance revealed
that no fewer than eight insurance companies in the market have secured
oil and gas reinsurance treaties all of which were packaged by overseas
reinsurers.
