By ROSEMARY ONUOHA
BOKO Haram’s insurgency in Nigeria has left more than 12,000 people dead since 2012. Some years back, nobody believed that terrorists’ attacks will become a regular occurrence in Nigeria.
Insurgency was viewed as a menace peculiar to the Middle East and some other places but not Nigeria. It was therefore a huge surprise when suicide bombings as well as other terrorists’ attacks became a daily occurrence. Since then, the wanton killings and destruction of lives and property by the Boko Haram sect and other terrorists groups have continued unabated.
So far, the federal and states government seemed overwhelmed by these attacks and most times, the victims are abandoned to their fate. Where these governments have offered assistance to the victims, such assistance doesn’t go very far to rehabilitate them.
It is in this wise that experts have called on government to consider creating an insurance intervention fund for victims of terrorism going forward.
At present, the insurance industry doesn’t have the capacity to cover risks associated with terrorism. Because the risk is sure to occur, leaving the insurance industry to take up all the cover could wipe out the balance sheet of the sector. This is where government can come by subsidizing premium for terrorism through creation of an intervention fund.
According to the Assistant Director (Inspectorate) of the National Insurance Commission, NAICOM, Mr. Sam Onyeka, premium subsidy can help make cover available and increase demand while maintaining fundamental principle of risk-based premium even as public risk mitigation can make risk insurable and cover available.
According to Onyeka, a good example is the US National Flood Insurance Programme where the State offers insurance capacity and insurance is distributed by private companies while some policies are subsidised by government.
Onyeka said, “Nigerian government must subsidise premium in an economy as ours. If we have the kind of USA arrangement, it will help us because we need insurance to sustain development.”
According to Onyeka, for the victims of terrorism to be fully rehabilitated, premium subsidy by government through the creation of an intervention fund is the last resort.
“Recall that government established the Asset Management Company of Nigeria, AMCON, after the Nigerian capital market suffered the massive meltdown in 2009. Government need to set up an intervention fund and come up as reinsurer that will partner the insurance sector in emergency situations,” Onyeka said.
According to him, state governments also can provide reinsurance facility for insurance companies that want to venture into terrorism insurance and make sure that they comply to international standard.
The question then is, are the insurance companies ready to partner with government to provide cover for terrorism?
Cover for terrorism
Affirming the readiness of insurers to rise up to the challenge, Commissioner for Insurance, Mr. Fola Daniel, said that underwriting companies have risen to their responsibility of doing insurance the way it should be done which led to an impressive rise in the volume of claims paid in the last financial year.
For Managing Director of FBN Life, Mr. Val Ojumah, the insurance sector should begin to accommodate terrorism cover because it is considered as political risks which can scare away investors.
Ojumah said, “Political risks are a major challenge for insurance companies. Most international investors coming into this economy do require political risk insurance but it is not available locally. But we have had circumstances where we have to buy that risk from international insurance market.”
Role of insurance in combating terrorism
Before now the insurance sector was considered a weak link in the Combating Financial Terrorism, CFT chain; however the sector has changed for the better.
According to Onyeka, insurance companies detect and report suspicious transactions to the appropriate bodies, stating “The way to protect themselves is to send alert because there could be problem someday.”
Onyeka said that any insurer that is not ready to abide by the directive should close shop stating “For so long in Nigeria we have left what we are supposed to do. We cannot continue to wait. We have to leap frog so that we can do other things.”
According to experts, the country is much likely to attain a sustained economic growth and development if it can adapt its insurance industry with innovative ways that will bring on board the generality of the country’s population.