Insurers in Senegal have formed the Oil & Gas Risk Insurance Pool to win huge insurance contracts in the hydrocarbon industry.
For a long time, Senegalese insurers have been kept out of covering large sub-regional dams, such as those of Diama (on the Senegal river) and Manantali (on the Bafing in Mali). They were confined to intermediation due to their small size and lack of technical expertise, reported Jeune Afrique.
Mr Mamadou Diop, a member of the scientific committee of the Senegalese insurer pool and general manager of Sonam Assurances, said that local insurers had in the past acted like a 'mailbox' for large projects. They only retained an extremely small part (less than 5%) of the premiums written.
With the discovery of hydrocarbon reserves off the Senegal-Mauritanian coast, insurers are keen to have a share of the business.
Major insurance deal
The Pool won a major deal last December to insure the facilities of oil operator Woodside in Senegal.
The president of the Oil and Gas Risk Insurance Pool of Senegal, Majdi Yassine, said that the contract was clinched through Sonam, which placed a bid on behalf of the Pool.
Sources told Financial Afrik that the budget is around $13m, which is one of the biggest deals in the sector. Co-insurance will be allocated equally and reinsurance cover will be provided by national reinsurer SEN Re. The Pool is also working with international partners of Woodside.
This contract is bigger than two others clinched by the Pool, which was set up last year by the Association of Insurers of Senegal (AAS), to strengthen the weight of local insurers in bidding for large contracts. Currently, it has 29 members. Industry players say that through pooling, the local insurance industry has been able to show large combined capacity for oil & gas insurance business.