NCAA Pushes for Stronger Aviation Insurance Standards as Stakeholders Seek Lasting Solutions
The Director-General of the Nigeria Civil Aviation Authority (NCAA), Captain Chris Najomo, has called for a comprehensive overhaul of aviation insurance practices in Nigeria to ensure full compliance with global standards and restore confidence across the aviation value chain.
He issued the call during the Civil Aviation Insurance Compliance and Financing Summit held recently in Lagos.
Speaking at the event themed “Securing the Skies: Navigating Aviation Insurance and Aircraft Finance Safeguards,” Captain Najomo stressed that Nigeria must close critical gaps in its aviation insurance processes in order to safeguard assets, strengthen regulatory oversight, and reassure international partners.
He highlighted several challenges currently confronting the sector, including the definition of modalities for retaining key elements of existing insurance contracts while adopting new frameworks; clarity on international expectations; and the need to ensure regulatory compliance without violating aircraft lease or loan covenants.
He further noted that integrating aviation safety oversight with financial indemnity obligations and creating operational guidelines for reinsurance arrangements involving foreign insurers remain key issues requiring urgent attention.
Delivering the keynote address, the Minister of Aviation and Aerospace Development, Festus Keyamo, underscored the importance of transparency and compliance across all segments of the insurance chain.
According to him, airlines must demonstrate full adherence to insurance requirements, insurers must expand their capacity and provide competitive, globally benchmarked products, and lessors and financiers must retain confidence that Nigeria remains a secure and stable investment destination.
Keyamo also reminded regulators of their responsibility to ensure operational harmony, strong alignment with global standards, and proactive communication in addressing the concerns of both domestic and international investors.
A major issue deliberated at the summit was the persistent conflict between Nigeria’s local content policy – which mandates airlines to insure with local underwriters – and the demands of aircraft lessors who insist on policies underwritten by top-tier international insurers such as Lloyd’s of London. Stakeholders acknowledged that this dual requirement has complicated risk management and compliance for Nigerian airlines.
In his presentation on the Addendum to Prudential Guidelines for Insurers and Reinsurers, NAICOM’s Director of Inspectorate, Bankole Ajibola, outlined new stipulations affecting aviation insurance. These include a maximum 5 per cent retention per aviation risk based on shareholders’ funds, mandatory senior-level authorisation for aviation placements, adherence to internationally recognised financial strength ratings, and the enforcement of local content requirements. He also emphasised a 72-hour occurrence-based reporting rule for all aviation-related incidents.
The Chief Operating Officer of United Nigeria Airlines, Mazi Osita Okonkwo, voiced concerns over the limited capacity of Nigerian insurers to handle high-level aviation risks, particularly those involving large-body aircraft. According to him, this limitation continues to hinder market growth and leaves operators heavily dependent on foreign insurers.
Okonkwo advocated for the liberalisation of the insurance market, arguing that competition would drive development, enhance underwriting competence, and align with the Federal Government’s renewed economic agenda aimed at reform, innovation, and sustainability.
Drawing a comparison with reforms in the banking sector, he noted that liberalisation propelled Nigerian banks into globally competitive entities – a transformation he believes the insurance industry also urgently needs.
“There should be liberalisation of the insurance market for the growth of the industry,” he insisted.
The summit also reviewed ongoing debates about the age limits of aircraft operating in Nigeria. Participants agreed that the safety of an aircraft is determined primarily by its maintenance status rather than its age.
They urged the Ministry of Aviation and the NCAA to revisit the current 22-year age limit placed on commercial aircraft, recommending a more flexible, maintenance-driven approach that reflects international practices.
The summit concluded with a shared commitment to deepen regulatory reforms, strengthen insurance capacity, harmonise conflicting requirements, and create a more predictable aviation insurance framework that supports safety, industry growth, and global confidence in Nigeria’s aviation sector.
