NNPC releases N12.9 billion for 2014 consolidated insurance account

The Nigerian National Petroleum Corporation (NNPC) has released a whopping N12.9 billion equals to $79.4 million as premium for its consolidated insurance account of oil and non-oil risks for the year 2014.

While Mutual Benefits Assurance plc is leading the non-oil business, Custodian and Allied plc is leading in the oil business, with Hogg Robinson Nigeria Limited as lead brokers in the oil business and Worldmark Group in the non oil.

The premium, which has been paid to the underwriters, moved from $71 million paid last year to the present $79.4 million, a development which operators said is good development for the industry. Though the brokers are yet to get their commissions, a number of them are excited over the increase in the number of brokers in this year’s business which moved from 42 last year to over 100 this year.

Laide Osijo, managing director, Plum Insurance Brokers Limited, in an interview with an online medium lauded the efforts of NNPC management in increasing the number of brokers in the business.

She also applauded the corporation for complying with Section 50 (1) of the Insurance Act 2003 that stipulates payment of premium before commencement of cover, otherwise known as ‘No Premium, No Cover’.

The oil and gas business earns the insurance sector huge premium and is profitable when there are no claims. On the other hand, a major loss could force the underwriters to pay huge claims.

As part of local content initiative of the Federal Government, the National Insurance Commission officially introduced the guideline for the operation of oil and gas insurance business in the country in 2010.

The guideline, which was issued pursuant to the provisions of the Insurance Act, 2003 and the National Insurance Commission Act, 1997, aims to increase the take of local underwriters in the business and curb capital flight from the country.

The guideline states, “No person or organisation shall transact an insurance or reinsurance business with a foreign insurer or reinsurer in respect of any life, asset, interest or other properties in Nigeria, classified as domestic insurance, unless with a company registered under the Insurance Act, 2003.”