Thirty eight underwriting firms in Nigeria generated N54.130 billion as gross premium from oil and gas insurance businesses in 2016; but expended only a paltry N4.642 billion as claims to companies.
Data obtained from the Nigeria Insurers Association (NIA), the umbrella body of insurance underwriters in the country, showed that a total of N38.8 billion was ceded as reinsurance to both local and foreign reinsurers while N15.9 billion was retained as net premium.
According to the data, of the insurance firms that participated in oil and gas underwriting businesses between 2012 and 2016, Leadway Insurance Ltd maintained the lead for the five year period as
the company in 2016, raked in N11.625 billion to beat 37 other underwriters.
An analysis of the data showed that Leadway generated N6.55billion in 2015; N7.719billion in 2014; N16.969billion in 2013 and N17.614 billion in 2012.
Leadway was followed by Custodian and Allied Insurance plc, which in 2016 recorded N8.049 billion in 2015. Mutual Benefit Assurance ranked second in gross premium from oil and gas business with gross premium of N6.344 billion. The company was also ranked second in 2014 with gross premium of N7.045billion.
Custodian and Allied Insurance again in 2013 came second with N13.212billion, and ranked second in 2012 with N6.986billion premium.
AXA Mansard Insurance Plc came third in 2016, with N3.813billion while Custodian and Allied Insurance came third in 2015 with N6.149billion. The company was ranked third in 2014 with N5.914billion premium. Sovereign Trust Insurance took the third position in 2013 with N4.420billion while Industrial and General Insurance occupied the third position in 2012 in terms of gross premium generation from oil and gas businesses with N3.985billion.
Royal Exchange General Insurance took fourth position in 2016 with N3.415 billion while AXA Mansard Insurance took fourth position in 2015 with N3.066billion. The company also retained the fourth position in 2014 with N4.338 billion premium.
Further analysis showed that Mansard insurance in 2013 came fourth with N3.392billion, while Sovereign Trust took fourth position in 2012 with N2.863billion premium. KBL Insurance ranked overall last occupying the 38th position with N6,594gross premium in 2016.The company failed to underwrite any oil and gas business in 2015,2014, 2013 and 2012 financial years.
According to the NIA, between 2007 and 2016 oil and gas insurance businesses in Nigeria achieved 15.4 percent growth.
Within the same period, the sector maintained steady growth except in 2010 when there was a decline in the oil and gas business growth from N31.577billion in 2009 to a decline of N26.095 billion in 2010.
There was also a decline in 2014 when premium generated from the class of business declined from N66.813 billion in 2013 to N52.871billion in 2014.It also went further down in 2015 to stand at N51.120 billion, before it rose again in 2016 to hit N54.130 billion.
The industry witnessed the highest growth in oil and gas insurance premium generation in 2013 when it grew to N66.813 billion. The least growth was recorded in 2007 when the premium stood at N12.941billion.
The NIA data revealed that the federal government’s local content policy and the formation of the energy pool to a reasonable extent enhanced the premium generated by the companies.
Before these policies came on board, oil and gas insurance was the preserve of foreign insurers but with the introduction of oil and gas pool formation, more oil and gas insurance business was given to indigenous insurers. Insurance sector operators have expressed optimism that the result of the oil and gas pool formed by the industry will reflect more on the premium generated by indigenous insurers in the years to come.
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