Oil & Gas: Thomas tasks operators on capacity, investment in technology

By Chiamaka Ajeamo

As part of measures to ensure that indigenous underwriting firms participate optimally in the oil and gas insurance business, the Commissioner of Insurance and CEO of National Insurance Commission (NAICOM), Sunday Thomas, has urged insurance companies to boost their capacity so as to underwrite huge risks.

The NAICOM boss also charged the operators to invest handsomely in technology which he descibed as the key drivers for developing the market.

Thomas, who gave the charge at the Insurance Directors’ Conference in Lagos, said the essence of the local content law is not being realised in the sector because many businesses in the aviation and oil and gas sectors were being reinsured abroad. He maintained that operators should strengthen their human and financial capital for effective participation in big-ticket risks.

According to Thomas, “it has been observed that the gains of domestication policy of the government, as enshrined in the Nigerian Content Development Act 2010, is gradually losing its meaning for the insurance sector. More businesses, especially in the oil and gas and the aviation sectors, are now being reinsured abroad.”

Another concern, he said, was the declining participation of life companies in the annuity business which was the emerging business for the industry.

“These are the areas where the industry can impose itself on the economy through the control of funds for national development,” he said.

Thomas stressed that institutions should be prepared to digitalise their processes, procedures and systems in order to make their operations seamless and real time.

“The Commission is investing heavily in automating its processes and expects nothing less from the insurance institutions. An industry Information Technology Guideline has been issued for the operators and the Commission requires your support and cooperation for effective compliance.

“The need to invest massively in awareness campaign about insurance cannot be over-emphasized as there is a consensus that public perception of insurance still remains very low largely due to lack of awareness by the public.

“Another lingering issue that has continued to hurt insurance business in the country is the total lack of understanding of the business of insurance and the benefits that are offered. The strategy must change, insurance institutions must make themselves visible in all geopolitical zones in the country and must take marketing of insurance products to a higher level than the present,” Thomas said.