03 April 2012, Sweetcrude, LAGOS – Prof. Joe Irukwu, an insurance expert, has called on insurance operators to take advantage of the local content law and participate actively in the oil and gas sector.
Irukwu who said this in Lagos regretted that the level of discipline on the part of insurance operators have dropped drastically despite enabling laws which they can capitalise on.
Irukwu said “Presently there are enabling laws to guide the practice of insurance, but it is so sad that the level of discipline has dropped drastically despite these laws.”
Irukwu, who is one-time Managing Director of Nigeria Reinsurance Plc, noted that the high level of discipline in the insurance industry in the 1960s and 70’s spurred the industry to growth and development despite the absence of enabling laws.
Irukwu decried the dearth of discipline in the insurance industry, lamenting that the sorry state of affairs in the sector curently was not the case when he and others were still active in the sector.
Irukwu, therefore, called on insurance practitioners to ensure that they abide by the laws guiding the profession as he described as false the popular saying by international oil companies that Nigerian insurance companies lack capacity to underwrite oil and gas risk.
He said that in making that statement, the international oil companies were merely talking for their pockets, just to encourage capital flight.
The insurance expert stressed that the country truly has the capacity to do the 70 per cent oil and gas business which the local content law permits her to cover.
According to him, the insurance operators must ensure that they actually underwrite oil and gas business and not fronting for international underwriters as has been the case all along.
In his words, “These people that keep saying that we don’t have capacity are only talking for their pockets and we the operators in the insurance sector must actually underwrite and not front for the captive insurers of these oil majors.”
He charged insurance practitioners to desist from aiding oil companies operating in the country to defy rules and regulations guiding oil and gas risk underwriting for their selfish gains.
According to him, ordinarily the oil majors want to play by the rules but some insurance practitioners who want to cut corners force them to do otherwise.
“Sometimes these oil majors operating in the country want to obey the laws guiding oil and gas risk underwriting, but we always find a reason for them not to,” he said.
According to Irukwu, the development is not encouraging because the oil companies have tended to see the practice as the standard norm in the industry, thereby throwing crumbs to Nigerian insurance companies while taking the huge chunk of oil business abroad.
Irukwu lamented that it is the high rate of indiscipline in the insurance industry that has made the practice to go on unabated for a very long time, calling on practitioners in the sector to imbibe the character of discipline.