Efforts by the Nigerian Insurance industry to retain capacity in oil & gas underwriting, curb capital flight and grow the local market in energy and allied risks underwriting has received a major boost with the inauguration of the Technical Management Board of the Energy and Allied Risks Insurance Pool of Nigeria (EAIPN) by Fola Daniel, the commissioner for insurance.
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 at the Commission’s corporate headquarters in Abuja, Daniel congratulated the Chairman of the Nigerian Insurers Association, Godwin Wiggle for bringing to fruition his desire for a pool that will address some of the challenges faced by insurance companies in oil and gas underwriting in Nigeria.
Presenting the Technical Board of the Pool to the Commissioner for Insurance, Chairman of the Board, Wole Oshin, stated that the Pool currently has 14 subscribers, who have contributed 40 percent of their subscribed lines amounting to USD$4m. 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 are: 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 the CFI 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 enthused.
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”.
In his response, the Commissioner for Insurance said 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.
He promised that the Commission will 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.
“I can tell you that I am delighted to have this event today. All my discussions with some players at the Lloyds market in London point to the fact that Nigeria is not ready to retain capacity and grow the market because the players have refused to establish Pools.
“With the inauguration of the technical management Board of the pool today, you have taken the bold and positive step to curb capital flight and grow the local capacity and I am sure the multinationals will be excited about this,” he stated.
Daniel expressed the hope that claims payment will be a major thrust of this pool and congratulated the Nigerian Insurers Association for working assiduously to ensure that the Pool becomes operational.
The Commissioner expressed satisfaction with the decision of the Technical Management Board to appoint Africa Re as pool manager, noting that the company is fully committed to developing the local market.