Insurers confirm increased retention for oil & gas risks on back of new pool
One year after take-off of the Energy & Allied Insurance Pool of Nigeria (EAIPN), a an initiative of the Nigerian Insurers Association (NIA) targeting at reducing premium flight in Nigeria, which has persisted due to lack of capacity, feelers from the industry shows that the pool that started with $4 million funding has made some progress. Though figures were still no available, the NIA confirmed that the local market retention for oil and gas businesses has increased.
The retention was 30 percent in 2014 according to figures from the National Insurance Commission (NAICOM).
Eddie Efekoha, chairman NIA said “I am happy to inform you that the Association efforts at increasing local retention and building capacity in Oil & Gas insurance is yielding positive results. The Board of the Energy & allied Insurance have been meeting, in fact they have held one AGM and the result is encouraging more companies are making enquires and to a large extent, it has received the support of the oil majors.”
With the modest achievement of the pool it has become a point of reference for others in Africa, Efekoha who is also the Managing Director, Consolidated Hallmark Insurance stated.
The Pool is being promoted by member companies of the Nigerian Insurers Association, marking a major breakthrough after failed attempts to structure a pool in the last few years.
In a brief but eventful ceremony to signpost the commencement of the pool a year ago in Abuja NAICOM, industry regulator said the pool will address some of the challenges faced by insurance companies in oil and gas underwriting in Nigeria.
The Pool according to its Chairman of the Board, Wole Oshin at the beginning currently had 14 subscribers, who have contributed 40 percent of their subscribed lines amounting to $ 4,000,000.00. He expressed optimism that other insurance companies that have expressed their interest in the Pool will subscribe to the Pool after the launching of the EAIPN.
The fourteen companies were Leadway Assurance Company limited, Custodian And Allied Insurance Plc, Aiico Insurance Plc, Lasaco Assurance Plc, Royal Exchange Insurance Co. Ltd, Consolidated Hallmark Insurance Plc, Sovereign Trust Insurance Plc, Linkage Assurance Plc, Industrial And General Insurance Plc, Nigerian Agric Insurance Corporation (NAIC), Sterling Assurance Company Limited, Prestige Assurance Plc, NEM Insurance Plc and NSIA Insurance
Oshin informed then that Africa Re emerged as the Manager of the Pool after a rigorous selection process, adding that the company is expected to use its global outreach and experience to manage the pool profitably and build the requisite capacity.
“The Technical Management Board went through a rigorous process in selecting Africa Re as the Manager of the Pool.
They have a very strong pedigree and an excellent track record in the management of Pools.” We are really counting on their expertise to build capacity and grow the local market and we trust that they will deliver on this mandate,” Oshin informed at the inauguration.
He expressed the hope that with NAICOM’s backing, “there will be a structure that will guarantee the continuous funding of the Pool and to ensure that the Pool will be adequately patronised, adding that “the Board of the Pool anticipates a situation where a large proportion of businesses emanating from the country will have some element of the Pool”.
NAICOM responding stated that the coming of the pool was long overdue as the benefits were immense and most international players in oil and gas business were anxiously waiting for the Nigerian market to make the bold move.
It then promised to support the pool and encourage more insurance companies to subscribe, adding that the Energy and Allied Insurance pool of Nigeria presents a great opportunity for the insurance industry to retain capacity and reduce capital flight.
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