Designing Terrorism Insurance For Nigeria!!!

Bloodletting, occasioned by the deep penetration of insurgents in parts of northern Nigeria, is forcing the insurance industry to weigh the possibilities of introducing terrorism insurance to mitigate the colossal loss incurred as a result of the attack.
Several persons have been killed, others maimed while properties valued at millions of naira have perished since the Islamist group, Boko Haram, began a massive bloody campaign in parts of the north.
State governments mostly affected by the attack as well as the federal government had deployed funds in compensation to those hit by the terror attacks.
Insurance companies are contemplating introducing terrorism insurance as a product that would bring about some measure of relief to victims’ families. However, the industry is faced with the stark reality of the high risk of terrorism. The assistant director (Inspectorate) of the National Insurance Commission (NAICOM), Mr Sam Chukwuka, said it is obvious that such attacks would occur and since there is no high public risk mitigation, the industry might be discouraged to venture into it.
Chukwuka, who spoke in Uyo, Akwa Ibom State, during an insurance conference for journalists explained that since there is obvious and real threat and high vulnerability level and since the funds are not there or any measure to prevent these threats, the industry might not want to underwrite such risks.
He suggested that risk mitigation should be studied and applied for sustainable insurance development.
But the commissioner for insurance, Mr Fola Daniel, however, pressed for insurance terrorism which he said has become necessary due to high level of insurgency in the country.
Concurring with Mr Chukwuka’s position, Daniel said, however, that the only way it can work and be sustained is for government to act as re-insurer to enable companies sell the product.
Daniel said that even though insurance companies are paying claims of dead soldiers and police officers under the group life, emphasis should be on the other citizens who equally fall victim of such attacks.
“Even though government may pay compensation, it may not be enough but if government comes as re-insurer where insurance claim stops government claims takes over,” the commissioner reasoned.
Daniel did not see anything big in that aspect of insurance if government understands the role it is going to play.
He said after all when kidnapping began, the industry was afraid to underwrite it but when foreign firms took up the responsibility, local companies saw the need to move in and today kidnapping insurance has been embedded in companies policies.
The commissioner commended the readiness of Continental Re for acquiring insurance facility to kick-start terrorism insurance in the country. He said insurance companies should take advantage of that and begin to access the facility while NAICOM pushes for government’s intervention for its sustainability.