By Rosemary ONUOHA

Capital flight from Nigeria to foreign insurance markets has been a re-occurring issue in the insurance sector. While experts have continued to identify series of factors as being the cause, lack of competent human capacity to effectively transact oil and gas risks business has been fingered as a major factor leading to capital flight from the insurance sector.

The situation whereby Nigerian insurers run abroad when given special risks to underwrite is becoming embarrassing, according to experts.

A worrisome trend

According to the General Manager of Wema Insurance Brokers Ltd. Mr. Gbenga Olawoyin, Nigerian insurance operators, both underwriters and brokers, don’t have enough specialists to underwrite oil and gas risks.

Olawoyin said “Majority of us have the licence to engage in insurance business, however, a lot of operators just take it for granted and have refused to train themselves on the intricacies of oil and gas risks underwriting.”

According to Olawoyin, this ought not to be so, because the insurance industry should be growing as the year advances.

For Former Head of State and Head of Interim Government, Chief Earnest Shonekan, the low capacity on the part of insurance operators to underwrite special risks despite the huge number of insurance brokers in the country is worrisome.

According to Shonekan, it is unfortunate that in spite of the number of underwriters and brokers in the industry, Nigerian companies still lack capacity to underwrite such special risks.

The way forward

On the way forward, Shonekan tasked insurance practitioners to brace up to the challenges of professionalism, by focusing on regular training and re-training.

According to him, there is need for insurance companies to move out of the box and expand their businesses to be able to underwrite bigger businesses.

“Stakeholders in the industry must join forces to formulate creative policies in oil and gas business, if possible, learn from South Africans. Although the image of the industry has dramatically improved in the last decade, there are rooms for improvement,” Shonekan said.

According to Shonekan, all over the world, there is rapid improvement in the image of the industry, but practitioners must avoid cutting corners in expanding their individual businesses, improve on usage of technology to transact businesses, as well as embrace professionalism which is very essential.

He said “I believe that something must be done to increase revenue of insurance sector to enhance its contribution to the nation’s Gross Domestic Product (GDP).”

For Mr. Wole Adetimehin, immediate past President of the Chartered Insurance Institute of Nigeria, CIIN, insurance practitioners must shun independent approach to doing things and align more effectively to the fundamentals of insurance practice globally which is pooling and sharing of risks.