Domestic airlines struggle to pay insurance premium -NAICOM
Nigerian airlines are struggling to pay the premium on their assets such as planes and the like, said Leo Akah, director of policy and regulation at the Nigerian Insurance Commission.
He said all carriers are breaking the insurance premium into chunks, with some choosing to do it monthly, some quarterly and some in chunks.
Akah revealed this while speaking on the sidelines of a two-day aviation, cargo and export conference in Lagos.
The NAICOM director said the insurance premium was often increased whenever there was a plane crash.
He noted that although aviation risks were low, they were of high severity and required a strong legal framework and regulatory principles in the insurance industry.
He said: “Our law says there is no premium or cover and if you don’t pay you are on your own. You can’t fly if you don’t have insurance. It is a problem. Even access to foreign currency to pay for your insurance abroad is one of the challenges of the sector. The insurance company will not ask you for naira.
“It is not optional for you not to have insurance as an air operator. If you do not insure your responsibilities for example, you cannot fly. Civil Aviation to ensure that any document submitted to them at the NCAA is proof that you have insurance so they can clear you to fly.
The huge insurance premium in the aviation sector has an impact on the cost of airline operations, which are passed on to consumers.
However, despite the low number of air accidents in Nigeria, insurance companies, especially those based abroad, charge air operators in the country high insurance premiums, a situation that has been attributed to the poor rating of mainland airlines in terms of safety.