NAICOM restates role of insurance in aviation industry

The National Insurance Commission (NAICOM), has highlighted the critical role of insurance in the aviation industry.

The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr. Olusegun Ayo Omosehin gave the outline while delivering his keynote address during the Fourth Chinet Aviacargo Conference, held in Lagos.

Mr. Omosehin noted the evolving landscape of the aviation sector, marked by advancements like electric and hybrid aircraft, predictive maintenance, and automation of air traffic control systems.

He stressed that these innovations, come with new risks that require robust insurance mechanisms to mitigate.

The NAICOM boss stated, “The future of the aviation industry is full of potential, but with that potential comes the need for comprehensive risk management strategies. Insurance serves as a vital safety net, ensuring that the financial burdens of potential losses are transferred to insurance companies, thereby fostering growth and development in the sector.”

He explained that aviation, being an international business, is inherently complex and fraught with risks such as accidents, equipment failures, and other operational challenges.

According to him these risks are managed through global risk transfer mechanisms like reinsurance, which spread risks across continents, ensuring resilience in the face of unforeseen events.

Also, Omosehin highlighted the importance of local expertise in risk profiling, stressing that while aviation insurance operates on a global scale, the knowledge and skills of local professionals are crucial in accurately assessing and managing risks in the Nigerian context.

He said, “The Nigerian insurance sector is uniquely positioned to understand the patterns, behaviours, and risk profiles of various sectors, including aviation. This understanding is critical in providing the right coverage and support to businesses operating in Nigeria.”

Acknowledging the challenges posed by disruptive environmental patterns and the need for the insurance industry to adapt to these changes, he called for a collective effort to grow the Nigerian economy sustainably, emphasising that insurance is not just about financial protection but also about enhancing resource allocation and stimulating investment in high-risk sectors.

He said NAICOM as the regulator of the insurance industry in Nigeria, is committed to ensuring the stability of the financial system, improving the soundness of insurance operators, and safeguarding the interests of policyholders.

Omosehin assured stakeholders that NAICOM would continue to support the aviation industry by promoting sound insurance practices that contribute to the sector’s growth and the broader economic development of Nigeria.

He urged all stakeholders to see the bigger picture and work towards collectively growing industries beyond immediate individual gains.

“The role of insurance should be seen as a critical part of the economy, facilitating investment, managing high-risk exposures, and contributing to the overall growth and development of our nation.” He stated.

Joseph Inokotong