The Chairman, Boff and Company Insurance broker Limited, Babajide Olatunde-Agbeja says, there is no Air Traffic Controller’s Liability (ATCL) insurance policy in place for the aviation industry in Nigeria.
He wondered what would happen if a traffic controller mistakenly directs two aircrafts into each other’s path, adding that, there have many claims of this nature over time worldwide with a few in Nigeria.
In a paper presentation entitled: Insurance and Aviation in Nigeria at the CHINET 2021 Aviation and Cargo conference in Lagos, Mr. Agbeja, emphasized that ATCL policy was compulsory for any aviation industry involved in ATC no matter how small the volume of traffic is.
“An ATCL insurance policy should be purchased immediately, by the relevant parastatal in the aviation industry”.
He noted that, while it is true that the present Government had been diverting a lot of resources to the transport sector lately, there was a lot of rot in the system in times past.
“Much equipment is obsolete and ineffective, leading many to believe that our airspace is unsafe”.
In addition, he said, there had been many aviation accidents, incidents in the past few years including near misses which fueled the notion of unsafe airspace.
Agbeja noted that, while the country is replete with well trained aviation personnel, the opportunities to operate in a robust manner were few because the airlines are few and with a limited number of aircrafts, “so many of these personnel are unemployed or under employed”.
“With continuous employment, experience is gained, and one operates better”.
The Boff Chairman listed the benefits of insurance in the Aviation industry like in other sectors of the economy to include peace of mind, eliminate dependency, reduce business losses and business expansion.
“Insurance products can be used as a collateral to secure a loan from a financial institution. Once you have insurance, you will be able to sleep easier without worries. Family members being adequately taken care of on the demise of the bread winner”.
“Airlines have collapsed in the past as a result of inadequate insurance at the time of a major loss”.
On insurance regulation in Nigeria, Agbeja explained that, the National Insurance Commission (NAICOM) set up by the Act of 1997 was responsible for ensuring the effective administration, supervision, regulation and control of insurance business in Nigeria and protection of insurance policyholders, beneficiaries and third parties to insurance contracts.
He stressed that, Aviation being a peculiar industry was of special interest to the Commission and thus NAICOM, being responsible for the protection of all stakeholders directed that all Nigerian insurance businesses must be fully insured in Nigeria in the first instance.
Agbeja noted that, where excess capacity was needed, NAICOM’s Approval in Principle (AIP) from them before seeking for capacity outside Nigeria to cover the excess.
“This excess must be insured with A rated companies [A by AM Best or A- by S&P]”.
“With this in mind, insurance brokers first canvass the market for the best rates, terms and conditions, determine which Insurance company would lead, seek to know what proportion each insurance company would accommodate (including the capacity provided by their reinsurance treaty) and collate all submissions. Where this is short of 100%, they apply for an AIP from NAICOM then places the excess abroad, through an international reinsurance broker”.
