- May 3, 2019
- Posted by: Uganda Insurers Association
- Category: Featured, News
The Consortium for Oil and Gas Uganda (ICOGU) was approved to operate by the Insurance Regulatory Authority of Uganda (IRA) in October 2016. Since then, the Consortium has worked to ensure that locally domiciled risks in this sector are insured by locally licenced Insurance Companies.
Oil and gas companies engage in and also subcontract a significant amount of exploration and production work, which brings with it huge operational and financial risks. Bearing in mind the magnitude of risks that the oil and gas sector is exposed to and the possible impact of these risks, the Insurers deemed it necessary to pull their technical and financial resources, and the best option to do so was as a Consortium, to cover these risks. This has also been done in other oil producing countries
The industry also considered the fact that the discovery and development of the Oil and Gas is for the benefit of Uganda and therefore it would only be appropriate to have our local Insurance companies duly licensed by the IRA insure these risks.
Will the Consortium insure all the risks related to the Sector?
As a special purpose vehicle, the Consortium will only insure medium and high risks implemented through well-constructed contracts that particularly relate to the International Oil Companies, the East Africa Crude Oil Pipeline (EACOP) and the Refinery Consortium.
All other risks such as worker’s compensation and motor vehicles can be insured directly with the individual insurance companies.
|Insurance opportunities||Risk Level|
|Oil well drilling equipment||
|In hole equipment|
|CAR (Construction All Risk)|
|Waste in Transit||High|
|Works and infrastructure of disposal units|
|Production Storage Facilities|
|Oil and Gas stocks|
|Delayed start up||Medium|
|CAR (Construction All Risk)||High|
|Oil and Gas Stocks||
|Goods in Transit|
Who are the members of this Consortium and how is it being managed?
Membership and participation in the Consortium is open to all licensed non-life insurance companies in Uganda and therefore is it as the discretion of each company to decide whether to join the Consortium and when.
The Consortium is currently comprised of 14 members and is managed by our national reinsurance company- Uganda Reinsurance company. The current members of the Consortium include APA Insurance, Britam Insurance, CIC General, Excel Insurance, Goldstar Insurance, Jubilee Insurance, MUA Insurance, NIC General, Nova Insurance, Pax Insurance, Sanlam General, State wide Insurance, Transafrica Assurance and UAP Old Mutual.
By partnering, we will achieve economies of scale, create efficiencies and increased capacity- backed up with international reinsurance support- to ensure appropriate and adequate insurance cover for these risks.
The Consortium is governed by a Members’ Agreement that has been duly registered by the Uganda Registration Services Bureau and all the members of the Consortium are registered under the National Supplier Database that is managed by the Petroleum Authority of Uganda (PAU).
With more than $15 billion set to be invested in the oil sector over the next five years, the insurance sector is targeting at least $100 million as premium income. For every premium paid, the consortium members will retain part of it, but the rest of it shall be reinsured so that when losses occur, they are shared in equal measure.
The Uganda Re-insurance Company Ltd, the only local re-insurer, will carry 15 per cent of all risks underwritten. This is in line with the Insurance Act that requires mandatory minimum reinsurance cessions with Africa Re-5 per cent, Zep-Re (PTA Re) – 10 per cent and Uganda Re – 15 per cent. Other International re-insurance partners include Munich Reinsurance, Swiss RE-Insurance Chaucer, Beazley, Aspen and others, all of which are in the “A” category on the international Re-Insurance market ratings.
For more information
Insurance Corsortium for Oil and Gas Uganda
T: +256 414 500 945
E: firstname.lastname@example.org or email@example.com or firstname.lastname@example.org