By Rosemary Onuoha
Some multinationals and high networth individuals engage in double insurance by insuring same asset locally and offshore due to lack of confidence in the capacity of local insurers.
Vanguard findings show that these high networth customers are compelled by the local content policy to insure locally, otherwise, they would totally ignore the local insurance market.
Former President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Babajide Agbeja who disclosed this to Vanguard noted that these customers prefer to pay for double cover because they don’t trust the capacity of local operators.
Agbeja said, “A lot of the big clients in Nigeria still do double insurance. First they insure to meet the requirement of the local content. However, they still insure abroad independent of their local insurers. So, they prefer to pay insurance twice because they don’t trust local operators’ capacity.”
Former Commissioner for Insurance, Mohammed Kari before now had said that many multinationals and high net worth clients doubt the capacity of local insurers because the current capital level of insurance companies was introduced thirteen years ago which is contrary to what is obtainable in other financial sectors.
Kari said, “The current capital of insurance companies was increased thirteen years ago. Which financial sector leaves capital stagnant for thirteen years? In the last ten years, microfinance banks license have been reviewed five times. That is how a financial sector operates and to a large extent a responsible operator should do these things without regulatory prompting.
‘‘Insurance anywhere in the world is the mobilizer of funds and provider of security. You cannot provide security if you don’t have adequate capital.”