Insurance firms strategise to underwrite special risks

DETERMINED to tackle the issue of inadequate capacity in the insurance sector, insurance companies have turned to the use of consortium underwriting strategy for special risks insurances, especially in dollar denominated accounts.
The Guardian learnt that the new initiative being sponsored by old generation insurance companies is aimed at building capacity and reduce the volume of off-shore insurance of assets domiciled in the country.
The underwriting syndicates, actively encouraged by the National Insurance Commission (NAICOM), are currently handling some dollar denominated accounts of insurance and related services in the oil and gas, aviation, marine and telecommunication sectors.
Some of the underwriting consortiums include LASACO Assurance led Consortium, Royal Exchange led Syndicate and Africa Re led African Oil and Energy Insurance Pool, among others.
Industry chieftains said yesterday, that the local content law has allowed the underwriting firms to participate actively in the lucrative oil and gas insurance accounts, public sector underwriting businesses, heavy engineering and construction, adding that they may earn more than N80 billion yearly from the off-shore assets domiciled in Nigeria.
For instance, LASACO Assurance led Consortium is current lead underwriter of many dollar dominated accounts, including Chevron Oil and Gas assets management/Olero Greek restoration project; Total E&P USAN project; Star Deep Water Petroleum Limited – Agbami Operational project; ESSO Exploration – Erha Operation and Production Nigeria Limited, among others.
The Managing Director and Chief Executive of LASACO Assurance Plc, Olusola Ladipo-Ajayi, told The Guardian yesterday, that the company’s key transactions in selected dollar denominated sectors have become major source of income for the company.
“They are in oil and gas, heavy engineering, construction, public and private sectors underwriting projects that LASACO has successfully led in recent times or is currently handling as the primary underwriter, or as a participating member of the handling consortium confirm our position as a key player in the Nigerian insurance industry.
Continuing, he said: “We have made significant progress in our energy and public sector underwriting businesses, using our considerable competitive strength and expertise to lead many big ticket accounts in the industry, with prompt payment of genuine claims, and superior customer service delivery.