16 July 2014

Nigeria: Companies to Introduce Terrorism Insurance

Photo: Vanguard
file photo.

The Commissioner for Insurance, National Insurance Commission of Nigeria (NAICOM), Mr. Fola Daniel, has said that terrorism insurance would soon be introduced in the country.

According to him, insurance companies would soon come out with policies to cover terrorism insurance.

Economic Confidential quoted Daniel to have said this at a recent retreat in Uyo, Akwa Ibom State.

The NAICOM boss noted that insurance is dynamic, saying that there should be no area of risk that should be regarded as no go area in the business. He described terrorism as major challenge in the country.

"Two years ago, some foreign multinational began to add terrorism or kidnapping to their portfolio and Nigerian companies were not ready for it. This became an excuse to wanting to export 90 per cent of such a risk abroad.

"What we did at the commission was to call insurers and let them know that nothing is spectacular about kidnapping that you cannot have an endorsement that will enable you to introduce kidnapping to your portfolio and a few of the companies rose to the challenge and added it to their policies so there is no longer an excuse to take this business abroad," he explained.

Continuing, he said the government can serve as reinsurers, citing the hurricane attack in the United States where insurers played their role but government paid heavily.

"If we don't, one smart director will one day recommend that one special agency be set up for terrorism outside NEMA and insurers will complain that someone has taken over their business.

"So we threw the challenge to Nigeria Insurance Association (NIA) to start something, make noise, do write-ups in the newspaper to let people know that we can do it but we need government to augment and this is the case in Britain, it is the case in America and am sure government will listen," he said.

Responding to enquiries as to why Nigerian insurance industries are afraid of selling terrorism insurance, he said: "It might not be true that we are not covering terrorism but we don't have an insurance cover for terrorism per se in Nigeria country but the insurance industry is picking the bill of all the soldiers that have died while fighting terrorism which come under the Group Life Policy of either the military or the Nigerian Police.

"Terrorism as an insurance on its own is what we do not have currently but it is doable because who are the losers under the current arrangement? It is the ordinary Nigerians that are dying.

"You can see all the houses that were burnt; there is no insurance cover for them whatsoever. I know the government is trying a lot to compensate but the government has limited resources."

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