NIA seeks risk transfer mechanism for infrastructure protection

THE Nigerian Insurers Association (NIA) has advised all tiers of government in the country to protect huge investments spent on infrastructure through risk transfer mechanism of insurance.

The Director-General of the association, Sunday Thomas, while speaking at an interactive session with journalists in Lagos, said insurance still remained the engine room for economic survival of any country.

According to him, the relevance of insurance to national development was not surprising as reduction of pangs of uncertainty have been helping various sectors of the economic circle and reduce the impact of crisis situation on the micro and macro levels.

He said that government should take cognisance of hundreds of billions of dollars that were spent every year for improving transportation, power, ports and terminals, and energy capabilities, need to protect these investments through the risk transfer mechanism of insurance.

According to him, the Nigerian insurance industry has a key role to play in contributing to the nation’s economic growth as a risk transfer and management mechanism, growth driver for other sectors of the economy and a huge potential for direct and indirect labour employment.

He said: “It is a provider of long-term capital investment needed for infrastructure projects which will help drive a competitive healthy and robust national economy.”

On the progress of the industry energy pool, the NIA boss said that the establishment of Energy and Allied Risks Insurance Pool of Nigeria (EAIPN) is to boost capacity, reduce capital flight. He said the bold and positive step will curb capital flight and boost local capacity to retain peak risks in the industry.

Thomas expressed joy that the project has taken off the ground with the inauguration of the technical management board for the pool and the appointment of Africa Re as the pool manager for the development of the local insurance market.

According to him, “the objectives of the pool are to develop local financial capacity and improve local underwriting skills, provide technical underwriting information to member companies, curb capital flight by way of reinsurance premium overseas and compete with international reinsurers and guarantee premium reduction.