Foreign insurers plan kidnapping cover for Nigerian market

The spate of kidnappings and other security challenges in the country are making foreign insurers to show interest in providing special covers for the Nigerian market, which local underwriters have yet to develop, investigations have revealed.

According to the underwriters, despite the prevalence of kidnapping, bombing and other security issues, which have caused loss of lives and properties, the local industry has not developed the technical capacity and experience to underwrite the risks.

During a recent visit to the country, the Senior Broker and Account Executive, Afro-Asian Insurance Services Limited, a firm of international insurance and reinsurance brokers, Mr. Chris Davies, said the firm came to meet with some of the local underwriters and explore the possibility of providing covers for special risks in the country.

Davies said the firm was partnering with Shepherds Insurance Brokers Nigeria to provide covers for special risks in the country.

According to him, the broking firm discussed some covers like kidnap and ransom, piracy, terrorism and other risks with local insurance companies to see how they can help to mitigate the losses arising from the risks.

“We will support with capacity from London, the Middle East and the international market to develop the local market and provide cover for some special risks,” he said.

FBN Insurance Brokers and Continental Reinsurance Plc had earlier disclosed their intention to partner United Insurance Brokers Group, United Kingdom, on terrorism and political violence insurance.

Last year, during the 18th African Reinsurance Forum of the African Insurance Organisation, it was disclosed that Nigeria accounted for a quarter of kidnap for ransom cases reported worldwide.

The Insurance Institute of Mauritius, the official host of the AIO forum, disclosed this in its newsletter on kidnap and ransom insurance cover during the conference in Balaclava.

The association said Nigeria had been designated as the global capital for kidnap for ransom due to the huge record of kidnap cases reported in the country yearly.

In the report, AIO stated, “The number of kidnaps for ransom in Africa continued to increase. In the first half of 2011,Africa’s proportion of the global total increased from 23 per cent in 2010 to 34 per cent.

“Nigeria is now the kidnap for ransom capital of the world, accounting for a quarter of globally reported cases.”

It further stated that kidnap and ransom insurance constituted the illegal taking and holding captive of an insured person and would be triggered under the policy by a financial demand as a condition for the release of the captive.

According to the organisation, the perils cover kidnap, bodily injury extortion, property damage extortion, product extortion, computer virus extortion, trade secret extortion, political detention and hijack.

Some of the local  underwriters, it was gathered, were already showing interest because they felt covers should be provided in view of the high number of individuals and corporate bodies that had lately being victims of threats to lives and properties in the country.

According to them, the common insurance products in the country presently do not include covers for kidnappings, riots, bombings and political violence.

PUNCH