The Minister of Aviation and Aerospace Development, Mr. Festus Keyamo has expressed concerns about the capacity of Nigeria’s insurance industry to manage risks associated with aviation operations.
The Minister who spoke as the special guest of honour at the 28th Annual Conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, highlighted the critical role of insurance in the aviation sector and the challenges posed by the industry’s current limitations.
He pointed out that the high cost of insurance is a significant factor contributing to the rising prices in aviation, and explained that insurance premiums in Nigeria are disproportionately high due to the local industry’s inability to underwrite aviation risks effectively.
According to him, this in turn, forced aviation companies to seek insurance coverage from international firms, further driving up costs due to foreign exchange and other associated expenses.
Keyamo said, “The aviation sector is inherently risky, and effective risk management is crucial for its sustainability. Unfortunately, our local insurance industry lacks the capacity to manage these risks adequately. This deficiency not only impacts the cost of operations but also affects the overall safety and reliability of the industry.”
The Minister advocated urgent reforms and capacity-building within the insurance sector to address these challenges, and suggested that partnerships with international insurance firms could provide the much-needed expertise and resources to bolster the local industry’s capabilities.
Also, Mr Keyamo emphasised the importance of regulatory support and government intervention in facilitating these improvements and underscored the importance of addressing the insurance issue to ensure the sustained growth and development of Nigeria’s aviation sector.
He noted that as stakeholders work towards solutions, it is hoped that the necessary reforms will be implemented to build a more robust and capable insurance industry that can effectively support the nation’s aviation needs.
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