Stakeholders Seek Stronger Insurance Capacity to Deepen Oil, Gas Local Content

Stakeholders in the Nigerian insurance industry have called for a deliberate strengthening of Nigeria’s domestic insurance capacity, saying the country can only maximise the gains of its local content policy in the oil and gas industry when more risks are underwritten by indigenous insurers.

The managing director and Chief Executive of Royal Exchange Plc, Idu Okeahialam, stressed the need to equip the local insurance companies to be able to take on the oil and gas industry.

She noted that retaining insurance premiums within the country would not only deepen local content but also support domestic capital formation, create jobs and strengthen the nation’s financial ecosystem.

Okeahialam argued that Nigeria’s next phase of local content development should move beyond indigenous ownership of oil assets to encompass local financing, insurance, technology and risk management. “True local content is not achieved merely when Nigerians own oil assets. It is achieved when Nigerians also finance, insure, manage and protect those assets,” she said.

Describing insurance as critical economic infrastructure rather than merely a regulatory requirement, Okeahialam said a robust insurance industry provides the confidence required for businesses to invest, lenders to finance projects and economies to grow sustainably.

“Without adequate insurance protection, projects become difficult to finance. Without effective risk management, investment becomes more expensive. Without confidence in risk mitigation, economic activity slows,” she noted.

She observed that the oil and gas sector operates within one of the world’s most complex risk environments, with operators exposed to operational hazards, environmental liabilities, supply chain disruptions, geopolitical uncertainties and rising cyber threats.

According to her, these evolving risks underscore the need for stronger collaboration between the oil and gas and insurance sectors to build resilience and sustain long-term investment. “The importance of local insurance capacity cannot be overstated.

“Every premium retained within Nigeria contributes to domestic capital formation. Every risk underwritten locally supports employment creation and professional development. Every investment in insurance capacity strengthens our financial ecosystem,” she said.

She stressed that the relationship between the two sectors must evolve from a purely transactional arrangement into a strategic partnership capable of driving economic transformation. “A stronger insurance sector supports a stronger oil and gas sector, while a stronger oil and gas sector supports a stronger economy.

“By strengthening local insurance capacity, we strengthen local content. By strengthening local content, we create greater economic value retention. And by retaining more value within Nigeria, we accelerate national development,” she added.