Insurance firms in Ghana seek to double their stakes in the underwriting of businesses in the country’s upstream petroleum sector an official told Xinhua here on Thursday.

Kwame Ofori, Managing Director of Enterprise Insurance Company Limited said the companies had agreed to transform the Ghana Oil and Gas Insurance Pool into a limited liability company by next year to do its own underwriting in the sector while the individual companies also carried out their own businesses.

In line with the Local Content policy for the petroleum sector the National Insurance Commission (NIC), partnered with the Petroleum Commission of Ghana to establish in 2014 the Ghana Oil and Gas Insurance Pool (GOGIP) to pool local resources to insure oil and gas businesses in the country’s upstream petroleum sector.

Ofori explained to Xinhua on the sides of a meeting at the Ghana Stock Exchange that it was usual for the big foreign insurance companies to manipulate local industry players as they had the choice as to whom to offer their businesses to.

“We knew that this was going to happen when oil and gas came in because there are huge re-insurance needs. So we decided to form a pool, and the pool will be the sole source that manages these things,” he added.

He added: “We set up the pool and the terms were clear, and the pool has been able to make so much money because when they give their price there is no alternative.”

Meanwhile with the experience gathered through the operation of the pool, many of the local insurance companies seek to go into oil and gas business.

“A lot of local companies want to go into oil and gas business so we the companies that formed the pool have agreed that come 2019 we will allow companies to partake,” he disclosed.

Ofori was optimistic that the retention of oil and gas business by the local insurance companies would increase by at least 100 percent since in addition to what the pool will deal with the individual companies interested in the business will also have their share.

The insurer however stated that businesses that companies would be allowed to take on will depend on the financial position of these companies to ensure that companies are able to pay claims in case of any loss incurred by their clients..

The creation of the pool actually helped us to gather experience in terms of how to actually deal with the big players. Otherwise the big players will come and say they were ready to pay two percent but with the pool the big players understand that when you are taking business from here it is nine percent and 10 percent,” Ofori added. Enditem

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