With 48 insurance companies on African Oil and Energy Insurance Pool (AOEIP) the pool’s gross premium income in the last five years has hit USD50.49million. A breakdown of the gross premium income showed that AOEIP raked in $3.225million in 2005; $14.038 million in 2006; $14.158 million in 2007; $6.060million in 2007; $16. 401million in 2008 and $19.818million as at December 2009.
AOEIP’s underwriting stood at $22.242million in the five year under review (2005 to 2009). The profit moved up from $2.456million in 2005 to $4.483million in 2006 to $5.107million in 2007. The African pool’s profit rose from $7.208million in 2008 to $9.926million in 2009.
Profit (loss) for the five years was $20.888million whilst membership subscription to the pool recorded $28.730million in five years.
Already, 36 Nigerian insurance companies are members of the African pool which has liquidity of $816, 953 as at December last year, banks placement was $27.143million.
The number of Nigerian insurance companies that are members of the pool has increased from 26 to 36 at present.
The Nigeria companies are competing with insurance companies from Algeria , Ethiopia , Egypt , Kenya , Madagascar , Senegal , Sudan , Tanzania , Zambia , Tunisia , Togo and Zimbabwe that are also into oil and energy insurance pool
Mr Ken Aghoghvbia, regional director, West African office of Africa Reinsurance Corporation who presented the AOEIP accounts in Gambia at the 37th African Insurance organization annual general meeting said efforts are made on a continuous basis to deepen the African Insurance market to underwrite large risks in the volatile oil, energy and aviation through capacity building has continued to receive major boosts, as the pool under the AIO continues to boost as more insurance companies that are joining the pool.
Aghoghovbia submitted that African underwriters are enjoying a swell time in big risks in oil business as the volume of business from those classes of insurance being written by African insurers are on the increase.
He said that the average share of the local market in past projects was about 12 percent whilst Africa Re and local reinsurers were said to have provided support for an average of 90 percent of the local participation.
He reiterated that with the increased minimum capitalization of some Africaninsurance companies particularly, Nigerian insurance companies, the market is ready to play a more meaningful role in the new oil projects. â€œFor the country to actualize its dream of growing its oil production to some four million barrels per this year, oil companies have increased their output of oil proportionately. This means an increase in the production of associated gas, that must be put to economic use.â€œ
According to him, â€œavailable regional underwriting capacity in major energy markets include: Europe: Capacity of $2918 million, split into four main regions ( London –70 percent of market, Germany , France and Switzerland share the balance of 30 percent). USA and Canada ‘s Capacity of US1,455 million split between the USA (62 percent) and Canada (38 percent)â€œ.
â€œCapacity is essentially available from global insurers domiciled within the region or Bermuda or Europe . Latin America : Capacity available is $735 million. Local market capacity is insignificant. Almost evenly split between global players onshore and those outside the region. Middle East : Capacity of US$500 million is split evenly between local and global players resident within the region. Asia pacific: Capacity of $1,250 million with local players accounting for one-sixth and global underwriting houses resident in the region accounting for the balanceâ€œ.