Insurers To Pay N17b Claims.
Insurers providing cover for NigComSat-1 now grounded in space may pay as much as N17 billion in claims. The satellite, built by the China Great Wall Industry Corporation at a cost of $340 million, became the first African geosynchronous communications satellite when it was launched in China on May 13 last year.
It is operated by the Nigerian Space Agency (NASRDA) and NigComSat, which said it was put into "emergency mode operation in order to effect mitigation and repairs."
A consortium of international insurance firms - including SpaceCo of France, Munich Cray of Germany, and the People's Insurance Company of China - reportedly provided cover for the satellite.
Local insurance companies, which banded together as co-insurers, may have retained about 10 per cent of the risks and shared an equivalent percentage of the premium. They are now expected to contribute an equivalent percentage of the total claims.
Sources said about five local insurance companies, comprising mainly of subsidiaries of banks, may be having problems raising the funds to pay.
The shareholders' funds of the banks amount to about N5 billion; so, as a source put it, "some insurance companies in the country which provided cover for NigComSat may be in trouble. "They are expected to pay claims arising from this failure to the tune of N17 billion. Where are they expected to get the money to settle the claims, is it from their N5 billion shareholders' fund?"
International WAPIC Insurance, the local lead underwriter in 2007, was said to have been edged out during the renewal for the business in 2008. NICON was supposed to be the lead underwriter, but its efforts were sabotaged by other insurance companies owned by powerful organisations and individuals who saw a juicy deal without anticipating problems.
NigComSat-1 is meant to boost Nigeria's communications revolution and make Internet technology accessible to remote villages in the country and on the continent.
It is also designed for security surveillance for other sectors such as the oil and gas, covering Africa and parts of the Middle East and Asia.