The National Insurance Commission (NAICOM) has confirmed the capacity and professional competence of the Nigerian insurance sector to provide cover for businesses in the aviation sector.
NAICOM, clearing the perception that the Nigerian insurance industry does have the capacity to underwrite risks in the aviation sector, said, “Insurance all over the world is anchored strongly on law-of-large-numbers, portfolio diversification and pooling arrangement with the support of reinsurance.”
Olusegun Omosehin, Commissioner for Insurance/CEO, NAICOM, made the clarification at the 4th CHINET Aviacargo Conference held Thursday in Lagos.
He said, “The re-insurance industry has come to the fore in the light of its crucial role in supporting catastrophe risks and in maintaining financial stability.
“Notwithstanding the international nature of aviation business and insurance operations, professionals in the country where the subject matter of insurance is situated cannot be ignored in profiling of the risk.”
Omosehin said the insurance sector was, therefore, best fit to understand the patterns, behaviours, and risk profiles of the various sectors, in the best interest of the insuring public and businesses in Nigeria, whilst layering its support from reinsurers.
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Speaking on the theme: ‘The role of insurance in aviation business’, Omosehin said NAICOM through its Prudential Regulations had specified minimum standards for underwriting, reinsurance, investments, reserving, and outsourcing.
According to him, the Prudential Guidelines also deal 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.
“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.”
Omosehin appealed to all stakeholders in the aviation sector to see the bigger picture of growing our industries beyond the immediate individual gains, rather, collectively growing an economy that is sustainable and self-reliance to absorb shocks.
He said, “The role of insurance should, therefore, be seen beyond just financial protection, to one that is a very critical part of the economy. The entire insurance value-chain is intended to enhance the efficient allocation of resources in market-oriented economies everywhere.”
“As a regulator in the financial services sector, our role is to ensure the stability of the financial system, improve the soundness of our operators in the insurance sector and safeguard policyholders’ interest.
