Ugandan insurers gear up to cover oil sector

February 22, 2019 in Business, Energy, Financial Services by Editor

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The local insurance industry is gearing up to cover companies involved in Uganda’s budding oil and gas sector which will mean total investments running into several billions of dollars.

Under their umbrella, Insurance Consortium for Oil and Gas, domestic insurers have been undergoing training sessions to handle the expected business. Latest reports say production from the oilfields in western Uganda will begin 2022.

“A lot of construction is going to be done in the lead-up to first oil including roads, the refinery, and an export pipeline. In oil and gas, everything is insured from – oil deposits to processes in upstream, to infrastructure in the midstream and downstream sectors. Investments are likely to scale over $15 billion in a period of five to 10 years. There are a lot of opportunities that our insurers can benefit from,” Maurice Amogola, the CEO Minet Limited Uganda said early this week.

Minet Limited, a notable insurance broker and its partner, the UK-based Aon Plc, hosted a training stint for local insurers in Kampala.

Amogola said the training was intended to create awareness for insurers and insurance brokers on how to handle oil and gas investors.

He said they want to build local capacity in line with the government’s efforts to promote local content.

“Oil and gas contracts are normally too big meaning that the local sector may not handle them alone. But with continuous training, the local insurance sector will grow and in five to 10 years, they will be able to handle any contract,” he said.

Neil Genders, Aon Director for Commercial Risk Solutions said the training will also help the local insurers to connect, network and learn from the international insurance companies from London.

He said, “Uganda’s insurance sector is well set. They have the basic knowledge of what oil and gas insurance is about. This training is just to enhance their knowledge and capacity.”

The Consortium brings together 16 insurance companies in Uganda to cover risks for the various oil and gas projects in Uganda. It has a combined capital base of $2 million. International re-insurance partners include Munich Reinsurance, Swiss RE-Insurance, Chaucer, Beazley, Aspen and others.

The Consortium is looking at providing cover for all aspects of developing the oil and gas sector including high and medium level risks for drilling equipment, rigs, in-hole equipment, bulk cargo and construction.