LAGOS, Nigeria — Airline owners and the Ministry of Aviation have criticised the insurance industry for designating Nigeria’s aviation industry as high risk which is attracting huge premium to airlines insuring aircraft locally.
Captain Roland Iyayi, CEO Top Brass Aviation, expressed the frustration of airline operators at a “stakeholders’ buy-in” of the aviation master plan and dinner in Lagos.
He said premium charged on aircraft insurance in the country is significantly higher than what is obtainable in South Africa and other parts of the world.
Iyayi said while the National Insurance Commission (NAICOM) is trying to deepen capacity in the insurance industry by domesticating aviation insurance, it shouldn’t be at the expense of the growth of the industry.
He noted that the huge insurance premium is impacting significantly on the cost of operations of airlines and ultimately the costs are transferred to consumers.
He urged the Ministry of Aviation to collaborate with NAICOM to drive down the insurance premium.
Speaking in similar vein, the Minister of Aviation, Princess Stella Oduah, said it is unacceptable that Nigeria’s aviation industry is designated high risk.
“It makes my heart bleed that Nigerian airlines registered in Nigeria have to pay twice or more than the amount foreign registered airlines pay on insurance premium.
“They say the reason why aircraft registered in Nigeria is cost more is because Nigeria is considered high risk nation. But we are not high risk. We have the Category One status; we wouldn’t get it if we are high risk. We are number 12 in Africa in terms of safety and globally we are regarded as safe. So why are we designated high risk back home?” she queried.
“Ultimately, it is the consumers that suffer because the cost is transferred to them,” she also noted.
She however assured that the ministry will engage NAICOM so that the premium can be reviewed downward.
“We are discussing with NAICOM. Since insurance of aircraft has been domesticated, thus if we must insure our aircraft locally, we must be shown respect and must be graded right and charged appropriate premium. We refuse to be graded high risk because we are not high risk,” she maintained.