Nigeria’s Commissioner for Insurance and CEO of the National Insurance Commission (NAICOM), Olusegun Omosehin, has emphasized the importance of local insurance content for the country’s aviation sector. He stated that Nigerian airlines must insure their aircraft with local insurance firms due to the domiciliary of the aircraft and other assets.
Omosehin explained that this is not an imposition, but a law, and that the policy stipulates that airlines must insure through local insurance companies to meet the requirement of local content. He also noted that the risks are shared with international insurers, such as 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,” Omosehin said.
However, Omosehin attributed the major issue with insurance in Nigeria to international politics and the dictates of financiers who own the capital. He emphasized that Nigerian insurance companies have the capacity to handle aviation-related insurance, including aircraft insurance, despite some insinuations to the contrary.
“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,” Omosehin added.
He further explained that the NAICOM is working to ensure that Nigerian insurance companies are adequately capitalised to handle aviation risks. “We are doing everything possible to ensure that our insurance companies are adequately capitalised to handle these risks. We are also working to ensure that they have the necessary expertise and capacity to handle these risks,” Omosehin said.
The NAICOM CEO also highlighted the importance of local content in the aviation sector, stating that it is crucial for the growth and development of the industry. “Local content is key to the growth and development of the aviation sector. It is important that we develop our own capacity to handle these risks, rather than relying on international insurers,” Omosehin said.
In conclusion, Omosehin emphasized that NAICOM is committed to ensuring that Nigerian insurance companies are adequately capitalised and have the necessary expertise to handle aviation risks. He also stressed the importance of local content in the aviation sector, stating that it is crucial for the growth and development of the industry.
