NNPC, Chevron, Mobil, Others Cede N16.93 trn risks to Foreign Insurers
Nigerian insurance industry ceded about N16.93 trillion to foreign insurers for risks they could not underwrite as a result of low retention capacity.
The insurance retention capacity is the maximum amount of risk retained by an insurer per policy/cover. Retention Capacity determinants/factors include Capital Base, Underwriting experience, Solvency Margin, Risk Size and Portfolio Mix, etc.
Speaking to Insurance Correspondents in Ijebu Ode, during the seminar organized by the National Insurance Commission (NAICOM), Director (Policy & Registration), NAICOM, Mr. Agboola Pius reeled out the figures of the top ten risks in Nigeria.
Agboola who was speaking on the theme: “Recapitalisation Roadmap: Implementation, Expectations and Benefits” also highlighted how much risks Nigerians insurance industry was able to retain locally and how much was ceded abroad.
On the top 10 insurance risks in Nigeria, it showed that Nigerian National Petroleum Corporation (NNPC), under its consolidated insurance package, totaling N35.8 trillion ($99.6billion), N27.9 trillion ($77.5 billion) is insured locally N7.9 trillion ($22billion) risk is ceded abroad.
Chevron Nigeria Limited, under its Energy insurance with total risk sum amounting to N5.1 trillion, retained N3.7 trillion locally and N1.36 trillion taken abroad.
Mobil Producing Nigeria Unlimited, under its energy package/physical damage insurance, retained N3.5 trillion insurance risks in the local market and took N1.15 trillion to foreign insurers.
Lafarge HOICIM under its combined property damage/business interruption and public liability insurance was able to retain N383.4 billion risks in Nigeria and ceded N181.4 billion abroad.
Dangote Fertiliser Limited, under its construction/erection in all risk and third party liability, amounting to N396 billion, retained N237.6 billion risk locally and ceded N158.4 billion overseas.
Yinson Production under its Energy Package (War and Terrorism Inclusive) with $1.2 billion sum insured, retained $484.8 million, and took $715.2 million abroad.
StarDeep Water Petroleum Limited, in its Energy Package amounting to $3 billion, retained $2.25 billion, while $750 million was taken abroad.
Dangote Refinery under its Construction/Erection All Risks,Third party Liability/ Owners Plant Delay in Startups sum insured totalling $6.7 billion, retained $1.54 billion locally and sent $5.16 billion overseas.
11 Plc, under its refueling Liability Insurance’s $1 billion total sum insured, $103 million was retained locally, $897 million taken abroad.
Centre for Energy Research and Trainings Affiliated to Ahmadu Bello University , in its Third Party Nuclear Liability Insurance with the sum insured amounting to $7.01 billion, $3.01 million retained with local insurers while $6.97 billion was sent to foreign insurers.
Agboola said the capital base of an underwriter is of great important, noting that a large proportion of the local risks are presently ceded outside because of low retention capacity just as he said that the increase in capital base would definitely increase retention capacity of the underwriters.
