Leadership (Abuja)
Ngozi Onyeakusi
17 November 2008
Lagos — Oil and gas- related risk exposure in the country stands at $101.14 billion ( N11 trillion) the Group Managing Director of NNPC, Emir Abubakar Yar' Adua, has said.
According to him, corresponding premium is at $234million while about 33 per cent or $33 billion risk exposure was retained in Nigeria .
Yar'Adua, who made this known at the 12th Champion Insurance Day/ Luncheon in Lagos while speaking on a topic, "Local Content Development in Nigeria 's Oil and Gas Industry-The Insurance perspective, stated that the net assets of 40 recapitalised insurance companies as at December 2007 was N177 billion or $1.5 billion.
He pointed out that capacity building was being pursued in such a way to identify new opportunities for local enterprises as well as training in target areas of competence to make sure that Nigerians acquire desired technological and managerial capabilities.
Yar'Adua noted that further domestication of other operation areas in oil and gas sector for instant fabrication, engineering etc should therefore, provide new business opportunities for the insurance industry, adding that the industry can witness growth just like every other sector of the economy and also demand for insurance services.
The insurance industry however, can meet up with future challenges only if it must think of further recapitalisation and adoption of risk-based capitalisation by creating separate balance sheets for each class of business and make effective use of co-insurance to pull capital, and equally get local reinsurance companies to provide treaties, Yar'Adua advocated.
He commended the local insurers for their efforts in the past three years in terms of training employees to acquire competence in oil and gas underwriting, adding that the recapitalisation of the industry is a step in the right direction.
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