No fewer than 600 insurance brokers have bided for the 2018/2019 insurance contracts of the Nigerian National Petroleum Corporation, NNPC.
According to an insurance industry observer, the NNPC account is the juiciest in the industry adding that the insurance brokers that succeed in the bid need no other business to have a successful financial year. She also adds that only about 40-50 amongst the bidding firms would succeed.
The Group Managing Director, (NNPC), Dr Maikanti Baru, disclosed this in Abuja at the 2018/2019 bid opening for insurance companies and brokers for NNPC oil and non-oil assets, adding that this represents 20 percent increase when compared with 500 insurance brokers that bided in the insurance year for 2017/2018. The Corporation, he said also saved N9.2 billion ($30 million) from insurance premium in the past 36 months.
“Last year, about 500 insurance firms and brokers participated in the process, and this year, as at the close of submission by noon, we have recorded over 600 participants. Baru stated that up until 2015, the NNPC’s insurance premium was over $76 million annually, noting that it had been able to reduce it to about $40 million annually over the last three years. “It is quite an enormous volume of assets and through the years we have improved on the situation.
When we came on board, the premiums that we are being charged was over $76 million, and we have succeeded in bringing it to a little just over $40 million.” He added that the Corporation carried along the National Insurance Commission (NAICOM), Bureau of Public Procurement, Nigeria Content Development Board and some Non-Governmental Organisations in the bidding process. He said that the Corporation had insisted on transparency in carrying out its bidding processes, saying that this had brought about positive changes in business transactions.
He stated: “The bidding process has helped NNPC to bring in more participants in all it is doing, especially with the insurance brokers. “This multiplicity has helped the Corporation over the past three years; we have saved about USD30 million from what we pay in insurance premium. “The trust of this result is transparency and openness, which has improved the chances, for new participants to participate in doing business in the sector,” he added. He said, “In terms of value, if you look at our oil assets, we are running into billions of dollars.
The non-oil, which is dealing with life and property and others is also is in billions and almost trillions of Naira worth of property and also human lives and other general insurance that we do”. He added, “We have also increased the number of Nigerian participants, because if all those that participate pass all our technical criteria, they get a bit of the action. It may be small, may be less than one per cent, but they will get a bit of the action. That is the way that we are trying to increase value and also increase local participation”.