Following recent complaints by Nigerian airline operators on double insurance for purchased or leased aircraft with both international and local insurers, insurance operators have charged airline owners to initiate discussion on common insurance cover between foreign insurers and their Nigerian counterparts.
The operators said they have to carry out double insurance in order to fulfill the directive of aircraft manufacturers and lessors who insist that globally recognised insurance companies like Lloyd of London must insure their aircraft.
Consequently, Nigerian insurers said the discussion has become necessary in order to cut down on the current high cost of insurance coverage plaguing airline operators.
THISDAY exclusively reported recently that airline operators said they pay over N30 billion annually on aircraft insurance lamenting that this was because of NAICOM’s mandate that all airline operators must insure their aircraft in Nigeria before they can fly.
In a swift reaction, insurance operators said every country has got laws business operators operating in that country must obey.
In his submission, the Managing Director Afriglobal Insurance, Mr Casmir Azubuike said local content as it affects aviation business is not different from what it is in other classes of insurance.
He said, “Law is law, in other countries of origin of the aircraft, they have similar laws; therefore, if their law is compelling them to insure and Nigerian law is also compelling them to insure, what they should do is to arrange for collaboration between Nigeria insurers and their counterparts abroad.”
Also, the Managing Director Universal Insurance, Mr. Ben Ujoatuonu said it was pertinent that airline operators insure their risks here in Nigeria in line with the local content rule.
According to him, it will help the development of the local market and reduce capital flight to international markets.
But the COO of United Nigeria Airlines, Osita Okonkwo said the problem airline operators face regarding insurance of their aircraft is that whereas there is a law in Nigeria that says you must originate insurance premium in Nigeria, aircraft manufacturers and lessors insist that the insurance of their equipment must be placed with international insurance companies.
“Even if you buy an aircraft today, it is a requirement that you have to insure it even if you pay with your own money. You buy it from Embraer or from Boeing; insurance must cover Boeing even though they have sold the aircraft to you,” Okonkwo said.