Only when the nation insurance industry can wriggle itself out of the doldrums of discounts and other entreaties which it so created that the sector can truly experience growth.

Given this heed in Lagos last weekend, Mr Ken Aghoghovbia, Regional Director West Africa Office of African Reinsurance Corporation who was a discussant at the oil & gas seminar sponsored by the National Insurance Commission and anchored by the Chartered Insurance Institute of Nigeria (CIIN).

One of the major discounts includes overriding commission and premium discounting. Overriding commission is money taken up-front by an agent, broker or lead underwriter who may have the exclusive territorial right for such class of business or agreement in an insurance contract, while premium discounting implies giving out the insurance business to co-insurers at rates lower than the agreed net with other parties.

Aghoghovbia  pointed out that the major problem facing the insurance industry in Nigeria which had stunted the growth for sufficient capacity in the sector is operators undercutting one another to the advantage of foreign operators.

Aghoghovbia decried the extent to which insurance companies could go in unhealthy business practices. He described a worthless situation of a locally originated business that was secured at net the price from the international market and discounted over and again before it finally got to the last co-insurer and re-insurer.

According to him, “Carrying out the business in secrecy where the co-insurers would not know or get the business in their real value is not good, because when there is claim, they would be made to pay the same amount with other foreigners, who got it at the net price.

He stated, “Let us stop the practice of killing one another because we can not survive from short cuts any longer and only then would we all enjoy the full benefit of the Local Content Development Act”.

He cautioned, “There is need to continuously do insurance business by measuring and evaluating the consequences and impact of actions taken”

Prof Irukwu who chaired Prof Chioma Agomo’s paper on ‘The Nigerian Oil & gas Development Act 2010- Lessons from the Implementation of Cabotage Act 2003’, said insurance businesses in the 60s were properly coordinated and organized even without the laws in place then yet he noted that that unethical business practices were not rampant in those years.

Irukwu however, warned that insurance companies that would survive the present day business operations are the ones that are able to spot unhealthy practices and correct them before they compound more problems for their companies.