Patience Saghana
The Nigerian National Petroleum Corporation (NNPC) and insurance operators in the country have come to the realisation that insurance companies are tearing themselves apart over oil premiums whilst they left other areas untapped.

Mr Earnest Nwapa, Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) regretted that the nation’s insurance practitioners have allowed themselves to be separated  by oil premiums, according to him, “Oil premium has divided the industry rather than unite it”.

He lashed, “The major problem we have in this country today is Nigerians themselves. We think that we can handle it our way even in the face of the law. Those foreigners we deal with respects the laws of their countries and they are aware that they should respect the laws of their host countries but because we think we can do things our way, we allowed them to flout our laws”.

Nwapa told insurance practitioners, “Insurance industry operators made sure that the Nigerian Local Content Act met their expectations and they should also ensure that the law is obeyed”
Mallam Ibrahim Hassan, Deputy Commissioner for Insurance (technical) confirmed Nwapa’s view.
Hassan observed that the struggle to attain a share of premium from oil and gas insurance by local underwriters and intermediaries in Nigeria has generated strong ill-feelings to the extent that the sector misplaced its unity of purpose.
He stated, “Rather than unite, oil premium has tended to divide the industry. This must be avoided if the real benefits of the Act can be realised”.

He said there are other business areas in which the industry could further be developed. “Beyond oil and gas the insurance industry in Nigeria needs to work hard to grow and deepen the insurance market.

Even with the best of capacity the industry cannot afford to depend on oil premium alone. In 2009, the gross premium from oil gas amounted to only N24.6 billion with net retained premium from oil and gas lower than one third of the gross premium”.

“The insurance industry should endeavour to take advantage of the great potential in life insurance business.  Observably, in the last nine years (2001-2008), life insurance in Nigeria has continued to grow at the rate of 19.4 percent as against non life rate of 23.37, with total premium generated from life business in 2009 less than US$1 billion as against South Africa’s US$7.3 in 2005 and over US$10 billion in 2009″.

Given the size of the Nigerian population, the Hassan believed that life insurance holds great potential for growing the industry gross premium.

He emphasised, “The industry must look inwards and consider tapping other untapped potentials within the industry. One of such areas of great potential is life insurance business”.