Policy Summersault, Insecurity, Raise Airlines’ Insurance Premium
Nigerian airlines have increasingly continued to pay higher insurance premium for aircraft insurance, THISDAY has learnt.
This was attributed to what experts described as increasing country risk in Nigeria. This included insecurity, government’s inconsistent policies in the aviation industry, which insurers dubbed lack of rule of law and what was referred to as harsh operational environment.
The Managing Director of Aero Contractors, Captain Ado Sanusi told THISDAY that the premium for aircraft insurance in Nigeria has increased and with the latest security breach at the Murtala Muhammed International Airport (MMIA), Lagos premium for aircraft insurance would further increase.
Sanusi also noted that since the crash of Boeing 737 MAX in Indonesia and Ethiopia, in addition to the crash landing of Russian jet in May this year, there has been increase in insurance premium for aircraft globally, noting that the global increase would almost double insurance premium in developing countries.
He noted that in Nigeria the general insecurity in the country, added to the recent security breach at the Lagos airport would multiply aircraft insurance premium for Nigerian carriers.
“The recent security breach at the Lagos airport, which was broadcast all over the world, including on CNN will certainly increase the premium we pay for aircraft insurance. There is general increase in aircraft insurance premium since the tragic crash of Boeing 737 MAX and that accident in Russia. But if the global insurance premium is 10 per cent they will give us 15 per cent because of what they call our country risk, the insecurity in the country and the recent security breach at the Lagos airport.
“We operate in a harsh environment. It is difficult to lease aircraft and our insurance premium is very high. This will dwindle the profits of our airlines and put them in precarious situation. It is difficult to operate profitably in our environment,” Sanusi said.
Explaining why Nigerian airlines pay higher premium than their counterparts in