NCAA urges insurers covering risks in aviation to follow global best practices

Chris Najomo, Director General of the Nigeria Civil Aviation Authority (NCAA), has urged insurers covering risks in the aviation sector to ensure greater compliance, resilience and adherence to global best practices.

Najomo made the call at the Civil Aviation Insurance Compliance and Financing Summit organised by the Authority recently in Lagos.

He outlined the objectives of the summit, themed Securing the Skies: Navigating Aviation Insurance and Aircraft Finance Safeguards, noting that key challenges include defining practical modalities for retaining essential elements of existing insurance contracts while transitioning to new frameworks.

Other challenges, he said, involve clarifying global expectations and international best practices in policy adoption and regulatory compliance; outlining technical requirements without breaching lease or loan covenants; harmonising aviation safety oversight with financial indemnity obligations; and establishing guidance for operationalising reinsurance frameworks involving foreign insurers under the new addendum.

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In his keynote address, Festus Keyamo, Minister of Aviation and Aerospace Development, said airlines must ensure full compliance and transparency in their insurance programmes, insurers must provide sufficient capacity and globally competitive products, and lessors and financiers must remain confident that Nigeria offers a stable investment environment. He added that regulators must maintain alignment, operational coordination and proactive communication.

Insurance firms and airline operators also discussed the longstanding dilemma faced by carriers who, under Nigeria’s local content policy, are required to insure with local underwriters, while aircraft lessors often insist that leased aircraft must be insured by major international insurers such as Lloyd’s of London.

In his presentation on the Addendum to Prudential Guidelines for Insurers and Reinsurers, Bankole Ajibola, Director of Inspectorate at the National Insurance Commission (NAICOM), identified key issues relating to aircraft insurance. These include a maximum retention per aviation risk capped at five percent of shareholders’ funds; senior-level authorisation for all aviation placements; adherence to international financial strength standards; local content requirements; and a 72-hour occurrence-based reporting rule.

Osita Okonkwo, Chief Operating Officer of United Nigeria Airlines, expressed concern over the limited capacity within the Nigerian insurance market to structure, arrange, place and underwrite high-level aviation risks, especially for large-body aircraft. He said this gap has stunted the growth of the domestic insurance sector.

Okonkwo described the prudential guidelines as only a first step in the insurance process and called for market liberalisation to promote competition—aligning with the federal government’s reform agenda, which seeks a more liberal and prosperous business environment. He noted that reforms in the banking sector had transformed Nigerian banks into global institutions, and similar reforms were needed in the insurance industry.

“There should be liberalisation of the insurance market for the growth of the industry,” he said.

Participants at the summit agreed that aircraft safety is determined by maintenance, not age, and urged regulators and the Ministry of Aviation to review the 22-year age limit currently applied to aircraft used for commercial operations in Nigeria. They also called on the NCAA to prequalify insurance companies allowed to serve the aviation industry based on capacity.

Ifeoma Okeke-Korieocha is the Aviation Correspondent at BusinessDay Media Limited, publishers of BusinessDay Newspapers.

She is also the Deputy Editor, BusinessDay Weekender Magazine, the Saturday Weekend edition of BusinessDay.

She holds a BSC in Mass Communication from the prestigious University of Nigeria, Nsukka and a Masters degree in Marketing at the University of Lagos.

As the lead writer on the aviation desk, Ifeoma is responsible and in charge of the three weekly aviation and travel pages in BusinessDay and BDSunday. She also overseas and edits all pages of BusinessDay Saturday Weekender.

She has written various investigative, features and news stories in aviation and business related issues and has been severally nominated for award in the category of Aviation Writer of the Year by the Nigeria Media Nite-Out awards; one of the Nigeria’s most prestigious media awards ceremonies.

Ifeoma is a one-time winner of the prestigious Nigeria Media Merit Award under the 'Aviation Writer of the Year' Category.

She is the 2025 Eloy Award winner under the Print Media Journalist category.

She has undergone several journalism trainings by various prestigious organisations.

Ifeoma is also a fellow of the Female Reporters Leadership Fellowship of the Wole Soyinka Centre for Investigative Journalism.

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