Yemisi Izuora
The chief executive officer of Linkage Assurance (CEO) Godwin Wiggle has said that the annual premium paid by Nigerian airlines and aircraft owners on their airplanes ranges between $100,000 and $1 million, depending on a number of factors which includes the size of the aircraft, the manufacturer, the brand and the use of the aircraft.
Wiggle said that an average commercial airline costs about $10 million (₦1.6 billion) and an average compensation per passenger is about $100,000 (₦16 million).
According to him, Multiplying these figures by 200 passengers (for an aircraft carrying 200 passengers apart from the crew members) and the damages that may arise if there is an accident, is a lot of risk.
Aviation insurance he observed requires large capital and even if all the insurance companies in Nigeria pool resources together, they may not have enough to bear the risk of the local aviation industry.
This is why domestic airline insure their aircraft offshore, he explained.
Wiggle Oriental News Nigeria learnt said that about 80 percent of Nigerian airlines insure their aircraft overseas, while the remaining 20 percent that insure theirs locally still have a major part of their risks hedged abroad.
Wiggle who was not happy about the situation said the development has resulted to immense loss to the country due to capital flight, as the airlines pay billions of naira as annual premiums on the insured aircrafts to foreign insurance firms.
Speaking on the increasing acquisition of local insurance firms by big global players, Wiggle pointed out that the development has its good side and ugly side.
“It signifies that our market has large potentials and is also attractive to foreign investors
It will bring transfer of knowledge, skills and global standard into the Nigeria Insurance Industry.
For instance AXA group of France is globally recognized in the Retail Insurance Market space”.
Giving further insight, he said, that coming into Nigeria as AXA Mansard will without a doubt help improve the Nigeria market in this regard.
He said, “There is also the issue of healthy competition with the entrance of these foreign players”.
On NaiCom autonomy, the Linkage Assurance CEO stated, “Autonomy of the commission will be a welcomed development as it will make the commission more effective and responsive to the challenges of the time.
The bureaucracy and red tape is said to hinder decision making in the commission thus slowing down efforts for growth within the Insurance Industry”.