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Nigerian insurers breach local content law, lose N44bn

Nigeria’s local insurance firms ceded about N81.8 billion to their foreign counterpart instead of N37.8 billion as provided by the relevant local content law on oil and gas insurance in 2022.

The law stipulated that 70 percent of total premium on the oil and gas sector insurance should be undertaken by the local insurance firms while their foreign counterparts take 30 percent.

Findings from data at the National Insurance Commission, NAICOM indicated that while the local firms actual underwriting was 35 percent, which translated to N43.9 billion out of the total N125.7 billion premium, their foreign counterparts took 65 percent which translated to N81.8 billion.

Details of the 2022 oil and gas insurance shows increasing disproportionate underwriting in favour of foreign insurance firms quarter-on-quarter.

In the first quarter of 2022, Q1’22, oil and gas premium stood at N50.2 billion, with a total of N25.2 billion or about 50 percent transferred to foreign companies.

In Q2’22, oil and gas premium declined to N21 billion, but ceding to foreign counterparts rose to 71.4 percent or N15 billion.

In the Q3 premium rose to N24.7 billion, and ceding to foreign firms rose to 72.5 percent amounting to N17.9 billion.

Decrying the development, NAICOM stated that the oil and gas portfolio lamentably remained a challenging angle in the market owing to its nature of enormous capital and professional requirements.

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