FG introduces revised insurance regulation to lower airfares, strengthen aviation sector
The Federal Government, through the Ministry of Aviation and Aerospace Development and the National Insurance Commission (NAICOM), has unveiled a new insurance framework for leased aircraft. This revised regulation is expected to improve the operational flexibility of airlines and ultimately lead to more affordable airfares for Nigerian travellers.
The announcement was made during an event in Abuja on Monday, where the Commissioner for Insurance, Olusegun Omosehin, outlined the objectives of the regulation.
According to Omosehin, the initiative is designed to stabilise the aviation insurance market while aligning with the government’s commitment to promoting local content and meeting the expectations of financiers and lessors.
He noted that the new regulation will make it easier for Nigerian airline operators to acquire new aircraft under leasing arrangements, giving them a competitive edge and enhancing service delivery across the industry.
“This development is expected to contribute positively to Nigeria’s Gross Domestic Product by creating opportunities for local capacity building and encouraging knowledge transfer,” Omosehin explained.
He added that by improving access to aircraft through better leasing terms, the cost of air travel could be reduced, benefiting passengers and the broader economy.
“We believe that this agreement will give operators greater assurance by enabling them to secure insurance within a defined timeframe,” he said. “A robust insurance framework will position Nigeria’s aviation sector to navigate challenges, adapt to industry changes, and remain viable in a dynamic global landscape.”
Omosehin also pointed out that a major concern for airline operators had been the restrictive insurance requirements imposed by aircraft lessors, particularly the stipulation that up to 95 percent of insurance coverage must be secured from offshore markets.
“Following extensive consultations, and in line with existing Nigerian laws, we have now reached a consensus that allows local operators, who take out aviation insurance on a net account basis, to cede up to 90 percent of the risk to international markets,” he stated.
“We have clearly defined the conditions under which this international capacity can be accessed.”
Minister of Aviation and Aerospace Development, Festus Keyamo (SAN), praised NAICOM for its proactive approach and effective collaboration, which led to the successful revision of the policy.
“This new framework represents a distinctly Nigerian solution that also aligns with international standards,” Keyamo said.
“The working group tasked with reviewing the policy engaged with global stakeholders and reached a consensus. We now have a comprehensive, revised insurance regulation governing leased aircraft in Nigeria.”
Speaking on behalf of the insurance sector, Dr Adetayo John-Fisher, Managing Director of First Standard Insurance Brokers Limited, welcomed the reform, describing it as a supportive policy that would create a more enabling environment for the aviation industry.
“This regulation will facilitate the Federal Government’s goal of growing the economy by removing barriers to aircraft acquisition,” he said.
Director-General of the Presidential Enabling Business Environment Council (PEBEC), Princess Zahrah Audu, applauded the cooperation among stakeholders and urged airline operators to step up their service delivery in response to the improved operating conditions.
Also speaking at the event, the Executive Chairman of United Airlines, Professor Obiora Okonkwo, who represented the Airline Operators of Nigeria (AON), called for smooth implementation of the revised regulation, stressing its importance to industry players.
The event was attended by key stakeholders in the aviation sector, including officials from the Nigeria Civil Aviation Authority (NCAA).
