Business Journal


As Construction Risks Rise, Insurers Seek New Learning Tools to Remain in Business

Mr. Tope Smart

Immediate Past President

African Insurance Organisation (AIO)

& Group Managing Director/CEO

NEM Insurance Plc

Prince Cookey reports!

Building collapse and its attendant pressure on insurers is fast becoming a new headache for operators in Africa’s insurance sector.

Indeed, latest figures on building collapse in Nigeria by the Building Collapse Prevention Guild (BCPG) suggests that about 61 buildings came down across the country in 2022 with Lagos State accounting for 20 of such incidents, representing 48.7 percent of cases.

In the same vein, the Lagos State Emergency Management Agency (LASEMA) also released its own data which states that 24 buildings collapsed in the State between January and July 2022.

While there is constant debate on why buildings usually come down, a recent report by the British Broadcasting Corporation (BBC) named five factors for such incidents:

  • The foundations are too weak
  • The building materials aren’t strong enough
  • Workers make mistakes
  • The load is heavier than expected
  • The strength isn’t tested

The Challenge of Compliance

The major challenge of checkmating incessant cases of building collapse in Nigeria is non-compliance with Sections 64 & 65 of the Insurance Act of 2003 which makes it compulsory to insure public buildings under construction against injuries or death to third parties in the event of any collapse.

In recent years, both the National Insurance Commission (NAICOM) and operators under the aegis of the Nigerian Insurers Association (NIA) have intensified public awareness on the issue without maximum result.

But in Lagos State, there is renewed commitment by the State Government to reverse the trend.

Mr. Lanre Omojola, Director-General, Lagos State Safety Commission (LSSC) made that clear in a recent statement:

“Our role is to ensure that there is enforcement but we are starting with engagement. We are partnering all the insurance companies in provision of digital solution platform for insurance cover. Safety is everybody’s responsibility and we shall continue to step up our responsibility at ensuring that there is safety across the state. That is why insurance comes in; that is why we are engaging and educating the public to ensure its sustainability.”

The Seminar

To stem the tide and probably develop new skills in construction risks business, insurers are turning to experts in the field to learn new tools to drive that segment of the market profitably.

In Nigeria, the Singapore-based Talent Asia Training & Consulting in collaboration with Grilas Consultancy (Pty) Limited of South Africa recently hosted a physical training session for the Nigerian insurance / reinsurance industry on a construction risk related topic: “Appreciating the C.A.R/ E.A.R Insurance Policy and How it Works – Plus Focus Session on A.L.O.P/ D.S.U Coverage.”

The training was presented by Pooba Mahalingam, Regional Risk Consultant while the other expert facilitator, Mr Reuben Chikudo delivered live via Zoom from South Africa.

With over 30 participants drawn from Reinsurers (Zep Re, African Re, Continental Re, Waica Re), Insurance Companies (NSIA, Axa Mansard) and related industry professionals and intermediaries, the focus was about risk and insurance aspects relating to project development.

The Objective

The workshop shared case studies, clauses and wordings relating to Construction Risks issues like conditional terms, endorsements and some interesting scenarios from project delay insurance coverage.

The purpose was to provide better understanding of engineering risk and insurance, application of the policy coverage and policy endorsement issues, differences between the insurance policy jacket and schedule.

Mr. Reuben Chikudo, Chairman of Grilas Consultancy (Pty) Limited commented:

“Great to be working with Pooba from Singapore who is willing to impart his technical knowledge with the participants from Nigeria. I have seen him in action in various events in Singapore and Dubai. We found that the participants were very interested and the session continued beyond the allocated time-line each day. It was a good and effective learning session….”

Comments from Participants

A few interesting quotes collated from the participants at the end of the training session:

  • Thanks to Talent Asia and Grilas for arranging this interesting event in Lagos with the facilitators who have this specialized engineering insurance expertise.
  • Frances Nwogbe – Waica Re
  • Appreciate the efforts to bring two experienced trainers, Pooba and Reuben who shared relevant key points during this 2-day session.
  • Emmanuel Ajibade – Continental Re
  • We found the technique of presentation in an interactive format very effective; Thanks to Talent Asia for this.
  • Kehinde Omotayo – Africa Re
  • The technical knowledge and presentation skills of Pooba as the Facilitator deserves commendation. Well done to Singapore for arranging this session.
  • Olufunke Utomwen – Zep Re
  • Very enlightening, both with content and the approach to the knowledge sharing.
  • Nkeonyeasua Olagunju- NSIA Insurance

NB: First published in Africa Ahead!


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