Weak retention of Nigerian insurers in the energy class of business

Despite the law established by the authorities in 2010, the Nigerian insurance companies are not always able to retain a substantial share of energy risks. The decree enacted by NAICOM authorizes them to underwrite up to 40% of the sums insured. In fact, retention of such risks does not exceed 5%.
Local insurers content themselves with frontings while major international groups get hold of the most of the risk. Furthermore, the regional capacity of West Africa is hardly exploited. A.M. Best does not expect significant changes in retention due to inadequate capitalization of local companies and to lack of expertise.