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Nigeria’s native insurance coverage companies misplaced about N81.8 billion to their overseas counterpart as an alternative of N37.8 billion as offered by the related native content material legislation on oil and gasoline insurance coverage in 2022.
The legislation stipulated that 70 p.c of complete premium on the oil and gasoline sector insurance coverage ought to be undertaken by the native insurance coverage companies whereas their overseas counterparts take 30 p.c.
Findings from information on the Nationwide Insurance coverage Fee, NAICOM indicated that whereas the native companies precise underwriting was 35 p.c, which translated to N43.9 billion out of the whole N125.7 billion premium, their overseas counterparts took 65 p.c which translated to N81.8 billion.
Particulars of the 2022 oil and gasoline insurance coverage reveals rising disproportionate underwriting in favour of overseas insurance coverage companies quarter-on-quarter.
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Within the first quarter of 2022, Q1’22, oil and gasoline premium stood at N50.2 billion, with a complete of N25.2 billion or about 50 p.c transferred to overseas corporations.
In Q2’22, oil and gasoline premium declined to N21 billion, however ceding to overseas counterparts rose to 71.4 p.c or N15 billion.
Within the Q3 premium rose to N24.7 billion, and ceding to overseas companies rose to 72.5 p.c amounting to N17.9 billion.
Decrying the event, NAICOM acknowledged that the oil and gasoline portfolio lamentably remained a difficult angle available in the market owing to its nature of huge capital {and professional} necessities.
It will likely be recalled that the federal authorities had set a goal of 70 per cent native content material for underwriting of oil and gasoline dangers, implying that 70 p.c of all insurance coverage dangers related to oil and gasoline enterprise together with prospecting, exploration, drilling, constructions, delivery, distribution, advertising, and transportation are to be insured in Nigeria with registered Nigerian insurance coverage corporations.
Nevertheless, power dangers are nonetheless considerably insured overseas resulting from low capability within the native insurance coverage business.
Talking on the scenario, Deputy Managing Director, Technical of Anchor Insurance coverage, Mr. Adebisi Ikuomola, mentioned that in response to the excessive stage of premium export emanating largely from oil and gasoline associated dangers, Nigeria use legal guidelines and laws to drive native participation via graduated domestication of those insurances. Nevertheless, there may be nonetheless a protracted technique to go.
He acknowledged: “Regardless of the native content material legal guidelines and laws established in Nigeria, insurance coverage corporations are but to completely make the most of the chance to successfully place themselves as main gamers able to main overseas companies within the underwriting of oil and gasoline enterprise.
“The mandates to corporations within the upstream petroleum sector to cede their insurance coverage enterprise to native insurers, is according to efforts to maximise the participation of native insurance coverage corporations within the oil and gasoline sector.”
