NAICOM chief says local insurance content important in aviation sector

Sade Williams /Business a.m.

Olusegun Omosehin, Nigeria’s commissioner for insurance and chief executive officer of the National Insurance Commission (NAICOM) says local insurance content is important for the aviation sector in the country. 

This comes as questions are being raised as to why Nigeria airlines are being asked to insure their aircraft with Nigerian insurance firms. But Omosehin said that the domiciliary of the aircraft and other assets is a major reason operators have to insure their assets locally.

Omosehin, who spoke at the 4th CHINET Aviacargo Conference in Lagos said: “Where the aircraft operates is a factor, where are you taking the aircraft to, where is it going to operate, we have to collaborate with the regulatory authority to ensure this happens. It is not an imposition as the operators are saying but a law.

“In Nigeria, the policy stipulates that airlines must insure through local insurance companies to meet the requirement of local content,” the NAICOM CEO said.

Omosehin, who spoke on the role of insurance in the aviation sector, noted that the risks are shared with international insurers, especially, Lloyds of London.

“The reality of aviation insurance is a global business risk emanating from one country criss-crossing borders. Many of them often end up in Lloyds of London and this is not peculiar to Nigeria. Other countries, even risks emanating from the United States, will end up in Lloyds because they have a great appetite for aviation risks and that is why they are re-insurance,” he said.

The NAICOM boss, however, attributed the major issue with insurance in Nigeria, even globally, to international politics and the dictates of financiers who own the capital.

“I don’t see why we consider this as an issue, but I think that there is a major issue around the demand of financiers that oftentimes are financing aircraft for the majority of our operators. Because they are the owners of capital, they then want to dictate where the insurance should be done. In this instance, these risks, which are the aircraft, are going to be flown in Nigeria, carrying Nigerian passengers operating Nigerian routes,” he added.

He, however, said that Nigerian insurance companies have the capacity to handle aviation related insurance, including aircraft insurance, despite insinuations in some quarters that they can not.