Local insurance companies earned N76.7bn from oil and gas businesses underwritten by them, while N41.5bn worth of risks were placed with foreign reinsurance companies between 2006 and 2009.Latest statistics from the Nigerian Insurers Association revealed that while local underwriters earned N14.9bn and N12.9bn in 2006 and 2007, N4bn and N6.4bn were reinsured respectively during the period.In 2008 and 2009, the local operators earned N17.4bn and N31.5bn respectively, while N14.6bn and N16.5bn of the risks were reinsured.According to NIA, the figures are the premium earned directly by the local underwriters from oil and gas business, excluding businesses underwritten by foreign insurance companies.However, the figures for 2010 are not available because, many of the insurance companies have yet to submit their last financial accounts to the regulator for approval.Last December, the National Insurance Commission officially introduced the guideline for the operation of oil and gas insurance business in the country to enable local underwriters to participate more.The guideline states, "No person or organisation shall transact an insurance or reinsurance business with a foreign insurer or re-insurer 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."The guideline also makes provision for all locally registered insurers to participate in any Nigerian oil and gas insurance business, subject to the limitations stipulated in their operational licences.The Commissioner for Insurance, Mr. Fola Daniel, said the Act would increase the local underwriters stake in the business and retain more premiums for the industry.According to him, the implementation of the Nigerian Local Content Act does not depend on support from abroad."The foreign underwriters that were the major beneficiaries of the whole arrangement, have been supportive, they have shown some considerable amount of understanding that the Nigerian laws are laws to be respected and obeyed, and I think to that extent, we have enjoyed some reasonable level of collaboration," he said.The Managing Director, International Energy Insurance Plc, Mrs. Roseline Ekeng, said oil and gas insurance covered all operations and facilities in the oil and gas industry.The major risks covered by Nigerian underwriters, she added, were fire and physical damage to oil facilities, cost of debris removal, well blow out, as well as war and political risks.Others, according to her, are burglary, loss of income as a result of peril insured, re-drilling expense, liability to the third party, cost of clean-up and control of seepage and pollution, and injury to or death of insured workmen.Ekeng said the Local Content Act had been of immense benefit to the local oil and gas market.Businesses previously placed with foreign underwriters, she added, were now being insured by local underwriters, who retained a proportion for their net account and re-insure the excess using various treaties and facilities.
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