The Executive Director, General Business, Leadway Assurance Plc. Mrs Adetola Adegbayi says the adoption of second module of Nigeria Insurance Industry Database (NIID) on marine insurance will guarantee reduction in fake marine certificates.
Speaking at training organized by the firm for the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos, Adebgayi commended the move by the industry to replicate NIID in marine in a bid to checked fake certificates online .
She regretted that most people were yet to understand that cargoes coming into Nigeria should be insured adding that it gave rise to increase in fake certificates in the system.
“Most people are still not aware that cargos coming into Nigeria has to be insured. People brings in cargoes into Nigeria that is not even insured tells you why we get fake. The requirement of the customs for goods importation, insurance is one of them, if you don’t have insurance, customs will penalize you. If your goods have arrived safely in Nigeria and they are asking you for insurance, without having insurance, the only thing is that is your clearing agent will pay a fine.
On aviation insurance, she attributed persistence increase in aviation premiums to effects of international aviation business, conversion rate of FOREX and scarcity of FOREX.
“I think challenge for premium in aviation is very massive. basically in terms of the premiums going up, You know we don’t manufacture aircraft here in Nigeria, aircraft are very expensive. and because aircraft are very expensive, any risk to be charged in dollars when converted to Naira and the aviation business owners earn their income in Naira, they now want to convert that dollars against Naira, by the time they convert that to Naira , they have to pay aviation, if I were them too, I will cry.
Because at the end of the day bulk of their money may be, 40 per cent of it will now be going into insurance. Typically, 30 per cent of earnings goes into insurance worldwide but when you now go to an environment where they are not earning in dollars and assets are priced in dollars and they to insure in dollars, it is a beat very difficult, it is a difficult business environment.
The Central Bank of Nigeria (CBN) gave the window for the aviation to be able to access currency at a window rate, you know they have different window rates for different industries. Aviation is one of the people they gave such windows, even haven said that, even there is a window, if there is no FOREX in the country, what do you do?. Because there was time when actually there was no FOREX in the country public wise.
So the challenge of running business when you assets are denominated in another currency is why they are crying out not so much because of that aviation premium itself has continue to go up. The premium may go up theoretically, but that is about market siphon insurance is an international business, so anytime there is aviation loss, regardless of where the aviation loss is, aviation underwriters affected will adjust there rate, when that is done, it will affect us. But when losses starts to go down, aviation rate will also go down. But Nigerian case is a double trouble, international rate then conversion to Naira”, she lamented.