One of the biggest customers of the insurance industry, the Nigerian National Petroleum Corporation, has completed arrangement to renew its insurance contract for this financial year for a premium of $79.4m (N12.9bn), investigations have revealed.
According to information at the disposal of our correspondent on Wednesday, the amount is the biggest chunk of the NNPC’s budget for the insurance of its refineries, drilling operations as well as the joint venture interests.
It was gathered that Mutual Benefits Assurance Plc had won the contract as the lead underwriter of the NNPC’s risks.
The company is expected to put in place an arrangement for other insurance firms to join it to provide cover for the corporation.
The oil and gas business earns the insurance sector huge premium and is profitable when there are no losses overtime. On the other hand, a major loss could force the underwriters to cough up huge claims.
As part of local content initiative of the Federal Government, the National Insurance Commission officially introduced the guideline for the operation of oil and gas insurance business in the country in 2010.