By Patience Saghana
LASACO Assurance Plc has emerged the lead insurer for the $12m insurance account of Exxonmobilâ€™s ERHA projects for 2010/2011 along with 21 underwriting companies.
LASACO Assurance took over the 2009/2011 insurance of the ERHA projects from Goldlink Insurance Plc which handled the business for 2009/2010 insurance year with a premium of $6m.
The increase in the premium charged might not be unconnected with the market agreement entered into by all insurance companies which emphasized appropriate pricing of all risks according to the size of the risk involved.
In a letter dated October 14, 2009, conveying the appointment of the successful companies, Exxonmobil picked LASACO Assurance Plc as lead underwriter in the account
Vanguardâ€™s investigation revealed that LASACO Assurance Plc had put in place a long-term strategy for its oil and gas department which started in year 2000 with the employment of one of the oil and gas insurance experts in the sector, Mr. Jide Wright, who is rated among the top four oil and gas experts in the industry after Chief Oladipupo Bailey, former Commissioner for Insurance, Mr Okenla and Mr Remi Olowude, Executive Vice-Chairman of IGI.
These men are known to have cut their teeth on oil and gas insurance from NICON Insurance Corporation.
The insurance sector has, over the years, aided economic growth and development in a number of ways: they promote financial stability and reduce anxiety in the system. By so doing, they permit businesses to operate with less volatility and risk of failure, thus providing greater financial and social stability within national economies. At the same time, underwriters reduce anxiety for individuals and business owners.
Besides, insurance companies mobilise national savings. Countries that save more tend to grow faster. Of the worldâ€™s 20 fastest growing economies over the last ten years, 14 had savings rates higher than 25 per cent of GDP, and none had a saving rate of less than 18 per cent. By contrast, 14 of the 20 slowest growing countries had savings rates below 15 per cent.
Insurance companies enable risk to be managed more efficiently. They do this by risk pricing, risk transformation and risk pooling and reduction. A competitive market success depends on largely on pricing.
Again, Insurers price risk through their underwriting and investment activities. Business owners and managers, potential investors, creditors, employees, and other stakeholders can use these risk pricing signals to make better informed decisions, thus enhancing national economic efficiency.
More so, the benefit of insurance to economic development is that insurers foster a more efficient allocation of a countryâ€™s capital. They gather substantial information to conduct their evaluations of firms, projects and managers both in deciding whether to issue insurance and in their roles as lenders and investors.
In making such investment and insurance decisions, insurers tangibly signal the marketâ€™s approval of promising, well_managed firms and projects and thereby foster a more efficient allocation of a countryâ€™s scarce financial capital and insurance bearing capacity.
Furthermore, LASACO Assurance, according to findings, has a crop of competent experts in its oil and gas department, hence the appointment is akin to reaping the harvest of its long_term strategic plan on oil and gas insurance business.
LASACO Assurance Plc has recorded 32 per cent increase in its gross premium of N2.33bn in 2008 as against N1.773bn in 2007. The companyâ€™s actual premium earned grew by 56 per cent in 2008 from N1.325bn in 2007 to N2.072bn, while total assets grew to N8.74bn from N8.6bn reflecting a 35 per cent increase.
Speaking at the companyâ€™s recent 29th Annual General Meeting in Lagos, Chairman of the company, Chief Akin Leigh, said the company incurred net claims of N360m in 2008 compared to N262m in 2007, showing a growth rate of 37 per cent.
Underwriting profit was N1.39bn for 2008 as against N835m in 2007, indicating a 67 per cent increase from the core insurance business. Leigh added that profit before tax was N610m and profit after tax stood at N458m while N533.59m was provision made for bad and doubtful debts in line with statutory requirement.
Speaking on future of the company, he said â€œIn order to continue our growth and service delivery efficiency supported by strong brad, we plan to compete the branding of the rest of our branches offices in the country.â€