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Local insurers seek foreign support for terrorism insurance

By on December 1, 2014

A number of local underwriters have approached their foreign counterparts for technical support in insuring risks associated with kidnapping and terrorism, an investigation has revealed.

While several soldiers and police have been killed in the North-East by Boko Haram insurgents; abduction of prominent people is still a major concern in the Niger Delta region.

Influential individuals and corporate companies whose employees are exposed to kidnapping due to the nature of their work are reportedly taking terrorism insurance cover secretly.

The Managing Director, AIICO Insurance Plc, Mr. Edwin Igbiti, said kidnap and terrorism acts had become major threats to a number of multinationals and corporate firms in some parts of the country, especially the North-East.

He said the insurance product was designed to protect individuals and firms operating in high-risk areas.

The managing director said AIICO in partnership with the International American International Group and Crisis Management Consultants recently held a simulation exercise on kidnap and ransom insurance.

To develop this product in the country, he said it was also creating support for insurance specialists and brokerage firms.

“The exercise will equally expose us to the various risks, dynamics and intricacies of the business of kidnap and how best to handle, manage and mitigate the identified risks,” he said.

He however noted that what the company had done was a simulation exercise and not a product launch.

According to him, the kidnap cover or policy does not pay ransom on behalf of the insured, but the insured must first pay the ransom; thus incurring the loss, and then seek reimbursement under the policy.

He said managing kidnap and other crises was essential in protecting the life and well-being of a victim as well as an organisation’s assets.

The Managing Director, Equity Assurance Plc, Mr. Ekpe Ukpabio, said that the company had relationship with foreign partners and was providing cover for kidnap and ransom.

He said, “We are having cases of kidnapping and ransom requests and we have actually done some policies already. We have renewed our partnership with some foreign reinsurers and brokers that are providing it. We have been able to give cover for this class of business.”

Some executives of Afro-Asian Insurance Services Limited, a firm of international insurance and reinsurance brokers, had visited some local insurers earlier to explore the possibility of providing covers for special risks in the country.

Afro-Asian Insurance which has partnership with Shepherds Insurance Brokers Nigeria said it was exploring ways to provide covers such as kidnap and ransom, piracy, terrorism and other risks with local insurance companies.

FBN Insurance Brokers and Continental Reinsurance, West Africa’s largest reinsurer, had also disclosed their partnership with the United Insurance Brokers Group of the United Kingdom on terrorism and political violence insurance.

During the 40th anniversary of the African Insurance Organisation in Balaclava, Mauritius, the Insurance Institute of Mauritius had said Nigeria accounted for a quarter of kidnap for ransom cases reported worldwide and designated the country as the global capital for kidnap for ransom.