Naira depreciation forces insurance firms to breach local content law

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A Nigerian newspaper and Online version of the Vanguard, a daily publication in Nigeria covering Nigeria news, Niger delta, general national news, politics, business, energy, sports, entertainment, fashion,lifestyle human interest stories, etc

Insurance companies in Nigeria transferred 63.4 per cent of the businesses they generated in the second quarter of 2023, Q2’23, to their foreign counterparts.

Details of the Q2’23 report by the National Insurance Commission, NAICOM, show the insurers generated N113.8 billion in oil and gas businesses, and N81.6 billion of that amount was ceded to foreign insurers. The local players were only able to retain N32.2 billion of the oil and gas businesses. Experts attributed the development to the dollarisation of the oil and gas business which is having a huge impact on local retention.

He said that the oil and gas insurance business is transacted in dollars and once the Naira depreciates, retention comes down while the value of the risk goes up.

 

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