‘Self regulation should be encouraged in insurance sector’

Uranta

The Managing Director, Niger Insurance Plc, Mr. Justus Uranta, speaks on how the local content in oil and gas sector can be achieved faster, and how dearth of credit in the financial system is affecting insurance business, in this interview with NIKE POPOOLA



How far has the insurance industry gone in its local content crusade?

I think fundamentally, what led to this local content issue is that foreign companies had been dominating the insurance of the local resources in the past. The government, aware of this, decided to encourage local players like us to participate in the insurance of our own resources. And to that extent, we are happy that the government has taken this step. First of all, they have given us a chance to insure 40 per cent of the risks in the sector, with the hope of increasing it to 70 per cent. This has given encouragement to local players. What had been happening in the past was that our financial capability, our capital and asset base were weak to the extent that we were not able to carry the huge risks that emanated from our economy. This made us to invite the foreign players who were supposedly well endowed financially to assist. But as you know recently, with the government‘s insistence on recapitalisation, our base had improved so much that we can compete to a very reasonable extent in terms of conserving what we used to export abroad. This is because our capital base has gone up and it is also expected that it will continue to go up.

What other support do you think the government should give the local insurers to be able to achieve the set target in the oil and gas sector?

I think that government should encourage self regulation rather than coax, or force regulation that compels the players to do what they have to do, without actually looking at their indices. If underwriters are encouraged to voluntarily beef up their capitalisation, they will sit down, look at certain indices and then be able to do what will be sustainable. When that is done, it will stand the test of time; it will last longer. I believe that as time goes on, companies will improve on their capital base, the local content in the oil and gas sector will be more domiciled within the country. And perhaps, the few risks in the sector that will be insured abroad will be well placed. All the risks cannot be domiciled locally because the world today is a global village. We cannot place all insurance risks within the country alone, we must seek international support and collaboration to be able to move the global economy forward.
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