CAPACITY
The steadiness sheet of insurance business greater than $1 billion, which is sufficient to cowl the aviation sector in Nigeria
Despite Nigeria’s low air crashes or severe incidents, insurance companies, notably these primarily based abroad, nonetheless cost the nation’s airline operators excessive insurance premiums, a state of affairs that was attributed to the dangerous ranking of the continent’s airlines in phrases of security.
Speaking to New Telegraph on the sidelines of a two-day aviation, cargo, and export convention, tagged: “CHINET,’ held in Lagos, Director of Policy and Regulations at Nigerian Insurance Commission (NAICOM), Leo Akah, admitted that premium charges had been normally raised any time there’s a airplane crash, stressing that although aviation dangers are low, they’re excessive in severity and require a strict authorized framework and regulatory ideas that function in the insurance sector.
Akah lamented that Nigerian airline operators had been discovering it extraordinarily troublesome to pay their premium on their property like plane and others, disclosing that many carriers are breaking it into bits, month-to-month, some quarterly and different items.
His phrases: “Our legislation says no premium no cowl and in case you don’t pay, you might be by yourself. You can’t fly in case you don’t have insurance. This is a matter. Even accessing international alternate to pay your insurance abroad is among the challenges in the sector. The insurance firm received’t accumulate Naira from you.
“It is not optional for you not to have insurance as an airline operator. If you don’t insure your liabilities for example you cannot fly. We liaise with the Nigerian Civil Aviation Authority (NCAA) to ensure that whatever paper is submitted to them at NCAA is evidence that you have insurance so that they can allow you to fly.”
The nation had, in the current previous, skilled ugly experiences the place reinsurance companies in the nation had needed to distance themselves from airlines any time there are problems with claims, particularly throughout air crashes. The causes based on consultants who spoke on the discussion board had been attributed to piecemeal cost of premium.
They cited points with the crash of Sosoliso Flight 1145 of 2005, which didn’t have a full cowl and one which lingered till the insurance companies in the nation pooled sources collectively to save lots of the state of affairs as a result of most of the victims of the accident had been Nigerians.
Likewise, many international insurance companies are very reluctant to function insurers to Nigerian carriers due to default in renewing their premium or paying their premiums as when due.
The enormous insurance premium is impacting considerably on the price of operations of airlines, that are transferred to customers.
Consequently, many plane house owners choose to register their airplanes exterior the nation to flee the excessive premiums they’re more likely to pay when the gear is registered in Nigeria due to the high-risk tag they place in most African international locations.
Chairman of Air Peace, Mr. Allen Onyema, had in 2017 admitted that the dearth of capability by Nigerian insurance companies to offer cowl for airlines was one of many main crises bedeviling indigenous airlines, an allegation that the Managing Director of Cornerstone Insurance Plc, Mr. Ganiyu Musa, dismissed when reminded that Nigerian insurance companies lack the capability and the massive portfolio to insure Nigerian airlines.
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