Despite the instability in the price of crude in the international market, insurance operators have appealed to foreign investors not to be deterred from investing in and doing business with Nigerian insurance industry because the sector is well structured. According to these operators, series of transformation programmes have been ongoing in the insurance sector which have helped to structure the industry very well.

The insurance operators say that the dwindling oil price will make national policy makers to be more ingenious in managing the precarious economic state, while the onus is also on practitioners to be more prudent and more resourceful in running their businesses.

President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Ayodapo Shoderu, said, “We must also continually put in place strategies to promote the nation’s industrial sector so as to transform our nation from consumption-based to production-based nation.”

To up the ante of the insurance practice, Managing Director of Prorisk Insurance Brokers, Mr. Oluwagbemiga Olawoyin said that insurance practitioners must improve on their expertise and professionalism, saying that if such is done everything will fall into its rightful place. According to Olawoyin, the insurance sector is still in dire need of more local and international investments.

On his part, Chairman of Standard Alliance Insurance Plc, Mr. Aliyu Sa’ad, said that it is expected that the Petroleum Industry Bill will be passed in no distant time, which will help improve local content, ensure technology transfer and job creation.

Also, Chairman of Capital Express Assurance Limited, Mr. Babatunde Adenuga, said that the Nigerian insurance industry has been characterised by certain weaknesses over the years but such challenges are being addressed, hence, the sector will be positioned to realise most of its potentials as well as attract sufficient businesses both locally and internationally.

Adenuga said that the industry has begun to witness a lot of emerging opportunities on the back of current government legislation which has supported the prospects of growth in the industry. According to him, the major risk exposures in the oil and gas industry may be broadly categorised as reservoir risk, facilities risk and political and fiscal risk.

Out of these, there are insurable risks which are the focus of the insurance industry as they come from the upstream activities; exploration and drilling, production and processing of hydrocarbon and downstream activities; refining, petrochemical, marketing and distribution and transportation.

Meanwhile, Standard & Poors, a rating agency in a report said that to effectively reduce losses in oil and gas risks underwriting, insurance operators should provide financial tools to help manage or reduce their exposure to huge losses. The rating agency said that the provision of financial tools to help manage or reduce their exposure to oil and gas risks is a key mechanism for achieving greater disaster resilience.