The Nigerian Energy Insurance Pool established about three years ago to deepen capacity of local insurers in oil and gas insurance is on the brink of collapse due to intrigues by players in the insurance market.

Vanguard gathered that as at the last meeting of the group, International Energy Insurance was said to have withdrawn its membership on the grounds that it no longer served its purpose of attracting patronage from the energy industry.

The withdrawal of IEI, it was gathered, had further weakened the pool as the remaining companies are seriously considering taking out their contribution and thus signalling the intention to collapse the pool.

Sources said the Pool comprising about 10 insurance companies was almost moribund following intricate tussle between it and leading underwriters on the Local Content portion of oil and gas insurance on one hand and NNPC and oil majors and their brokers on the other.

The NEIP was floated by some insurance companies to improve capacity of insurance companies in writing oil and gas business but its takeoff had been continuously frustrated by both internal and external conflicts.

It was gathered that operators of the local content policy consider including NNPC and major multinationals and their insurance brokers consider the pool an interest group that is not representative of the industry and thus, can only be seen as a group representing the interests of companies that decide to join it.

On that basis, they say, the pool can only get business on the strength of its bids for businesses and not as a group representing underwriters' interest.

But the remaining few members of the pool say the pool was conceptualised as a consortium of insurance companies with additional capital to take on risks that are considered excess of the market's capacity instead of ceding the business outside the country.

Although the concept was all-embracing and meant for all insurance companies with capacity for additional lines in oil and gas insurance, few companies that were already insuring energy risks rendered the pool unworkable, a member of the pool told Vanguard.

What was intended by the formation of the pool, one of the member companies stated, was to help increase retention and reduce avoidable outflow of foreign exchange that result from the ceding business that would otherwise find capacity locally.