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West African insurers position for oil & gas insurance -Aghoghovbia

West African insurance companies have positioned themselves to keenly participate in oil and gas business especially those emanating from within the continent.
Validating the preparedness of the West African insurance industry, Mr Ken Aghoghovbia, Regional Director (West African Office), African Reinsurance Corporation, said the Anglophone West African insurance sector has organized itself in a way that the sub-region can no longer be ignored in the oil and gas insurance business.
According to him, “The insurance sector in Anglophone West Africa is well positioned to offer its services to the Oil and Gas industry”.
Aside from the sub-region’s strive to enhance its capacity and competence for the big risks, West African insurance companies have proven beyond doubt to have a good grab of the oil and gas risks.
Aghoghovbia affirmed that the Nigeria insurance industry for instance, is continually developing its knowledge base of the industry following the frequent training and exposures to international brokers and underwriters.
He said, “Insurance companies have set up Oil and Gas desks to bid for the insurances of major oil risks, though they are not yet in a position to quote on these risks”.
In Ghana, he enunciated that National Insurance Companies Consortium was formed to manage the Oil and Gas portfolio, adding that SIC Insurance Company Limited was appointed the leader of the Consortium.
The consortium, he said, is open to all members of the Ghana Insurers Association underwriting non-life business whilst he remarked that the formation of the consortium, all insurances would be placed locally and reinsured to international markets.
“The reinsurance commissions received are set aside to cater for all the expenses of handling the business, training of the market on Oil and Gas business and building reserves to facilitate higher market retention.  There is therefore no eagerness by insurers to get the business at all cost. However, the growth in market knowledge of the business may be at a slow pace since the participating insurers in the consortium would not have the personal drive to urgently acquire the relevant knowledge and underwriting skill.  It is also wondered if this could be an enduring arrangement or whether establishing a Pool would not be a better option”.
At this juncture, he advised insurance companies in the West African sub-region to join the oil and energy insurance pool to boost their capacity. “Pools are a group of insurers that have come together to subscribe a capacity for the underwriting of a particular risk. Businesses received by a Pool, are shared to all its members according to their subscribed capacity.  For instance, an Oil Pool would require all members to cede to the Pool a proportion of their oil and gas business, up to the Pool’s capacity.  The entire business received by the Pool shall then be offered on original terms basis to members, subject to any reinsurance protection. Pools are usually formed for risks with high values, that are of hazardous nature and for which underwriting skills are limited.  A good example is the African Oil and Energy Pool, which was formed in 1989 by the African Insurance Organization (AIO) and has been very successful.
It would be recalled that African Oil and energy pool reported a premium income of $9,694,545 in the financial year ended December 31, 2008. An underwriting profit of $10,019,535 was recorded in the year under review against $9,022,116 posted the year before.
The number of Nigerian insurance companies that are members of the pool has increased from 26 to 31 at present.
The pool at its Management board meeting in Nairobi, Kenya, early last month considered the applications of the six companies admitted having gone through their accounts and fond them eligible to be members of the pool.
According to the pool, “Application for membership of the pool was received from Tunis Re and five Nigerian companies-Universal Insurance Plc, Aiico General Insurance Company, Union Assurance Company Limited, Royal Exchange General and Continental Reinsurance Plc”
The financial statements were analyzed and the companies were found to be eligible for membership. The managers therefore recommend admission with a participation of US$200,000 each”
Africa Oil and energy pool has reported a premium income of $9,694,545 in the financial year ended December 31, 2008. An underwriting profit of $10,019,535 was recorded in the year under review against $9,022,116 posted the year before.
Within the period under review, two West African insurers also joined the league of 40 insurance companies in the African countries for Oil, Energy Insurance Pool bringing the total to 42.
The two companies are Mainstream Reinsurance Company, Ghana and Nigeria ‘s Regency Alliance Insurance Plc, totaling 42 companies now in the oil and energy pool.
Regency Alliance’s admission into the pool has increased the number of Nigerian companies in the pool to 26 companies.
The Nigeria companies are competing with insurance companies from Algeria, Ethiopia, Egypt, Kenya, Madagascar, Senegal, Sudan, Tanzania, Zambia, Tunisia, Togo and Zimbabwe that are into oil, energy and aviation insurance pool while insurance companies from Benin Republic and Cameroon are for the oil and energy pool just as Libya, Morocco, Ghana, and Eritrea are for aviation pool only.

West African insurance companies have positioned themselves to keenly participate in oil and gas business especially those emanating from within the continent.Validating the preparedness of the West African insurance industry, Mr Ken Aghoghovbia, Regional Director (West African Office), African Reinsurance Corporation, said the Anglophone West African insurance sector has organized itself in a way that the sub-region can no longer be ignored in the oil and gas insurance business.According to him, “The insurance sector in Anglophone West Africa is well positioned to offer its services to the Oil and Gas industry”.Aside from the sub-region’s strive to enhance its capacity and competence for the big risks, West African insurance companies have proven beyond doubt to have a good grab of the oil and gas risks. Aghoghovbia affirmed that the Nigeria insurance industry for instance, is continually developing its knowledge base of the industry following the frequent training and exposures to international brokers and underwriters. He said, “Insurance companies have set up Oil and Gas desks to bid for the insurances of major oil risks, though they are not yet in a position to quote on these risks”. In Ghana, he enunciated that National Insurance Companies Consortium was formed to manage the Oil and Gas portfolio, adding that SIC Insurance Company Limited was appointed the leader of the Consortium. The consortium, he said, is open to all members of the Ghana Insurers Association underwriting non-life business whilst he remarked that the formation of the consortium, all insurances would be placed locally and reinsured to international markets. “The reinsurance commissions received are set aside to cater for all the expenses of handling the business, training of the market on Oil and Gas business and building reserves to facilitate higher market retention.  There is therefore no eagerness by insurers to get the business at all cost. However, the growth in market knowledge of the business may be at a slow pace since the participating insurers in the consortium would not have the personal drive to urgently acquire the relevant knowledge and underwriting skill.  It is also wondered if this could be an enduring arrangement or whether establishing a Pool would not be a better option”. At this juncture, he advised insurance companies in the West African sub-region to join the oil and energy insurance pool to boost their capacity. “Pools are a group of insurers that have come together to subscribe a capacity for the underwriting of a particular risk. Businesses received by a Pool, are shared to all its members according to their subscribed capacity.  For instance, an Oil Pool would require all members to cede to the Pool a proportion of their oil and gas business, up to the Pool’s capacity.

The entire business received by the Pool shall then be offered on original terms basis to members, subject to any reinsurance protection. Pools are usually formed for risks with high values, that are of hazardous nature and for which underwriting skills are limited.  A good example is the African Oil and Energy Pool, which was formed in 1989 by the African Insurance Organization (AIO) and has been very successful.It would be recalled that African Oil and energy pool reported a premium income of $9,694,545 in the financial year ended December 31, 2008. An underwriting profit of $10,019,535 was recorded in the year under review against $9,022,116 posted the year before.The number of Nigerian insurance companies that are members of the pool has increased from 26 to 31 at present.The pool at its Management board meeting in Nairobi, Kenya, early last month considered the applications of the six companies admitted having gone through their accounts and fond them eligible to be members of the pool.According to the pool, “Application for membership of the pool was received from Tunis Re and five Nigerian companies-Universal Insurance Plc, Aiico General Insurance Company, Union Assurance Company Limited, Royal Exchange General and Continental Reinsurance Plc”The financial statements were analyzed and the companies were found to be eligible for membership. The managers therefore recommend admission with a participation of US$200,000 each”Africa Oil and energy pool has reported a premium income of $9,694,545 in the financial year ended December 31, 2008. An underwriting profit of $10,019,535 was recorded in the year under review against $9,022,116 posted the year before.Within the period under review, two West African insurers also joined the league of 40 insurance companies in the African countries for Oil, Energy Insurance Pool bringing the total to 42.The two companies are Mainstream Reinsurance Company, Ghana and Nigeria ‘s Regency Alliance Insurance Plc, totaling 42 companies now in the oil and energy pool.Regency Alliance’s admission into the pool has increased the number of Nigerian companies in the pool to 26 companies.The Nigeria companies are competing with insurance companies from Algeria, Ethiopia, Egypt, Kenya, Madagascar, Senegal, Sudan, Tanzania, Zambia, Tunisia, Togo and Zimbabwe that are into oil, energy and aviation insurance pool while insurance companies from Benin Republic and Cameroon are for the oil and energy pool just as Libya, Morocco, Ghana, and Eritrea are for aviation pool only.


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