By Sola Alabadan

The Commissioner for Insurance, Mr. Olusegun Omosehin has called for mutual cooperation between the operators in the Nigerian insurance and aviation sectors so that the nation’s insurance industry attain its rightful position in the economy.
Omosehin gave this charge while speaking on “The Role of Insurance in Aviation Business” at the 4th CHINET AVIACARGO Conference on Thursday in Lagos.
He said that the insurance sector is a critical part of any nation’s economy and has the potential of galvanising the optimal performance of other sectors.
The NAICOM boss added that “It is therefore imperative to plant “Insurance” at the center of any equation designed to enhance, sustain and facilitate economic growth and development of any country.”
While pointing out that aviation business is an international business that is complex in its designs, operations and fraught with risks of accidents, equipment failures and all devices that can ground operations, as well as threaten assets of the industry, he noted that the nature of insurance operations is also international due to the concept of spreading of risks.
“Aviation insurers transfer risks globally through Reinsurance, pooling and mechanisms. Insurance is the most favoured risk transfer mechanism to buffer crystallisation of unforeseen events such as accident, fire, and
air crashes, which have tested the resilience of the insurance industry.
Insurance as an international business cannot therefore be seen to work in isolation,” he stated.
In view of the fact that the insurance business all over the world is anchored strongly on law-of-large-numbers, portfolio diversification and pooling arrangement, he said it is on this strength that risks insured in a given country will find itself in many continents of the world by way of underwriting and placements.
Omosehin maintained that the roles of insurance cannot be overemphasised as it helps and allows airlines, manufacturers, operators to transfer the financial burden of potential losses to insurance companies.
Besides, he said insurance also plays pivotal role in facilitating investment and financing, especially as the aaviation industry is a capital-intensive industry that requires huge funds and investors are more likely to fund and venture in aviation when there is adequate insurance coverage in place.
While assuring operators in the aviation sector that they are in safe hands, Omosehin informed that NAICOM through its prudential regulations has specified minimum prudential standards for underwriting, reinsurance, investments, reserving, and outsourcing.
The Prudential Guidelines, he added also deals with aviation insurance and returns, with the ultimate intention of protecting consumers and stakeholders in the industry, ensuring a safe and stable insurance industry, as well as boosting confidence in the sector.
According to him, some of the prescribed minimum prudential standards that guides activities in aviation underwriting in Nigeria includes the fact that the general requirements require that all aviation insurance business shall be conducted in accordance with extant insurance laws and other relevant regulations.
He listed others as “Ensuring that establishment of underwriting terms and conditions for any aviation and its associated risks in Nigeria are the responsibility of an Insurer duly licensed to transact insurance business in Nigeria. This is without prejudice to an Insurer’s need to seek expert advice from its reinsurers for appropriate risk rating/pricing.
“All Underwriting firms are required to ensure that all aviation insurance
transactions are conducted in compliance with Contract Certainty principles and requirements; amongst which all aviation insurance liability policies for any Nigeria domiciled risk are to conform to the minimum Passenger Liability Limit as required by the Nigerian Civil Aviation Authority.”

By Sola Alabadan

The Commissioner for Insurance, Mr. Olusegun Omosehin has called for mutual cooperation between the operators in the Nigerian insurance and aviation sectors so that the nation’s insurance industry attain its rightful position in the economy.
Omosehin gave this charge while speaking on “The Role of Insurance in Aviation Business” at the 4th CHINET AVIACARGO Conference on Thursday in Lagos.
He said that the insurance sector is a critical part of any nation’s economy and has the potential of galvanising the optimal performance of other sectors.
The NAICOM boss added that “It is therefore imperative to plant “Insurance” at the center of any equation designed to enhance, sustain and facilitate economic growth and development of any country.”
While pointing out that aviation business is an international business that is complex in its designs, operations and fraught with risks of accidents, equipment failures and all devices that can ground operations, as well as threaten assets of the industry, he noted that the nature of insurance operations is also international due to the concept of spreading of risks.
“Aviation insurers transfer risks globally through Reinsurance, pooling and mechanisms. Insurance is the most favoured risk transfer mechanism to buffer crystallisation of unforeseen events such as accident, fire, and
air crashes, which have tested the resilience of the insurance industry.
Insurance as an international business cannot therefore be seen to work in isolation,” he stated.
In view of the fact that the insurance business all over the world is anchored strongly on law-of-large-numbers, portfolio diversification and pooling arrangement, he said it is on this strength that risks insured in a given country will find itself in many continents of the world by way of underwriting and placements.
Omosehin maintained that the roles of insurance cannot be overemphasised as it helps and allows airlines, manufacturers, operators to transfer the financial burden of potential losses to insurance companies.
Besides, he said insurance also plays pivotal role in facilitating investment and financing, especially as the aaviation industry is a capital-intensive industry that requires huge funds and investors are more likely to fund and venture in aviation when there is adequate insurance coverage in place.
While assuring operators in the aviation sector that they are in safe hands, Omosehin informed that NAICOM through its prudential regulations has specified minimum prudential standards for underwriting, reinsurance, investments, reserving, and outsourcing.
The Prudential Guidelines, he added also deals with aviation insurance and returns, with the ultimate intention of protecting consumers and stakeholders in the industry, ensuring a safe and stable insurance industry, as well as boosting confidence in the sector.
According to him, some of the prescribed minimum prudential standards that guides activities in aviation underwriting in Nigeria includes the fact that the general requirements require that all aviation insurance business shall be conducted in accordance with extant insurance laws and other relevant regulations.
He listed others as “Ensuring that establishment of underwriting terms and conditions for any aviation and its associated risks in Nigeria are the responsibility of an Insurer duly licensed to transact insurance business in Nigeria. This is without prejudice to an Insurer’s need to seek expert advice from its reinsurers for appropriate risk rating/pricing.
“All Underwriting firms are required to ensure that all aviation insurance
transactions are conducted in compliance with Contract Certainty principles and requirements; amongst which all aviation insurance liability policies for any Nigeria domiciled risk are to conform to the minimum Passenger Liability Limit as required by the Nigerian Civil Aviation Authority.”