…as NAICOM to engage authorities on airports’ insurance
The Federal Airports Authority of Nigeria’s (FAAN) failure to insure airports across the country has had a detrimental impact on domestic airline operations, according to Edward Boyo, the founder and CEO of Overland Airways.
Boyo urged the National Insurance Commission (NAICOM) to engage with the relevant authorities to ensure that all airports in Nigeria are properly insured, lamenting that poor airport infrastructure has resulted in significant damage to aircraft, with airlines bearing the financial burden.
Speaking at the 5th CHINET Aviacargo Conference at the 21st Akwaaba African Travel Market in Lagos on Tuesday, Boyo highlighted the need for proper insurance coverage for airports, citing issues such as inadequate wildlife control and runway deterioration, which have caused damage to aircraft.
“These infrastructures are not insured,” he said. “The government would have to meet its own responsibility.”
In response, Olusegun Ayo Omosehin, the Commissioner for Insurance and CEO of NAICOM, assured that the commission is willing to engage with the authorities to address the issue.
Omosehin noted that the underlying rationale for compulsory insurance is to protect members of the public from harm and that NAICOM has been empowered to enforce compulsory insurance.
Omosehin, who was represented by Usman Jankara Jimada, the deputy commissioner for Insurance at NAICOM, explained that Nigeria’s insurance industry may not have the required capacity to reinsure a particular risk locally 100 per cent, so NAICOM has ensured that before any insurance company takes any risk outside Nigeria, the company needs to have utilised available local capacity in Nigeria, adding that once that is done, NAICOM would give the company approval to insure abroad.
“We have now insisted on very sound underwriting practices. Let me reiterate here that insurers are in the business of making profits. They are not there to make losses. And when we say sound underwriting practices, we are not just saying make sure you price your risk very well. You take cognisance of the risk that is brought to the table.
“This ensures that if there are claims that there are losses, you know, the insurer can pay or settle that claim. It makes no sense if you pay $10 for a risk that is worth $1,000 and there’s a loss, and you’re not being paid. So what NAICOM has done is to say, Pay the right price for your product.
“In doing that, you are then also able to meet the resulting obligations that will arise from insurance contract. Of course, we’ve also insisted on what you call contract certainty. Before now, you would have had aviation policies that were not too clear about the terms.
“We’ve banned all sorts of contract uncertainties to the effect that all insurance policies must be such that the policyholder understands the terms and the conditions of the policy,” he explained.
Bimbo Onakomaiya, MD/CEO, PeakThrust Insurance Brokers Limited, mentioned there are about 370 registered aircraft in Nigeria, out of which 147 are with the Nigerian Air Force and about 170 domestic aircraft for business and pleasure.
According to Onakomaiya, in addition, there are about 31 airports, about 92 airstreams and 13 scheduled commercial aircraft operators in Nigeria and growing, adding that there is no way Nigeria would have such a high number of fleet without having a very strong insurance backing for these aircraft.
“And so there is a need to working hand-in-glove with NAICOM. A better part of synergy is what we can expect. We cannot expect synergy if both of those industries are not strong. Because when we have synergy of different areas of both industries, we would have an better results”.
She said the industries are getting stronger by the day, especially with the Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025).
Onakomaiya said the Nigerian economy is actually a developing one, heavily reliant on trade, logistics, and transportation, adding that the transportation industry cannot do without aviation.
She mentioned that what the insurers do, and where the synergy is important, is that as insurers, they must cover and promote business confidence and ensure that all the risks involved are actually mitigated.
“You’ll be shocked that there’s piracy within the aviation industry. So, it’s very important for us to work together. There’s also the aspect of human capital. There are human beings involved in these operations. There’s the group life insurance for these human beings. There’s the group personality accident insurance for these human beings and other forms of insurance coverage.
“All these require synergy between the insurance and aviation industry. Emerging synergies will enhance safety. It will deepen Nigeria’s ability to compete in the global aviation industry,” she added.
