By Ayo Susan
The Nigeria Civil Aviation Authority (NCAA) and the National Insurance Commission (NAICOM) have formalised their long-standing cooperation with a new Memorandum of Understanding (MoU) designed to strengthen the regulation, oversight and effectiveness of aviation insurance in Nigeria.
The agreement, signed recently in Abuja by Captain Chris Ona Najomo, Director-General, Civil Aviation at the NCAA, and Mr. Olusegun Ayo Omosehin, Commissioner for Insurance and Chief Executive Officer of NAICOM, also establishes a Joint Technical Committee on Aviation Insurance.
DEVELOPMENT:
The MoU creates a more formal institutional framework for the two regulators to coordinate on aviation insurance adequacy, compliance, risk management and oversight.
Captain Najomo said that the agreement reinforces a shared commitment to aviation safety, financial resilience, regulatory compliance and the protection of passengers and other aviation stakeholders.
“Aviation remains a paradoxical industry that is globally recognised as the safest mode of transportation, yet characterised by high-impact operational risks.
“As the Authority statutorily responsible for regulating and mitigating these risks at the State level, our safety mandate must be complemented by a robust, transparent, and verifiable insurance framework.
“This partnership with NAICOM strengthens that foundation and reinforces the operational safety and financial resilience of the Nigerian aviation sector.”
The NCAA and NAICOM have previously collaborated on the assessment of the adequacy and viability of insurance policies procured by aviation operators under Part 18.14 of the Nigeria Civil Aviation Regulations 2023.
Najomo said the new framework would deepen that cooperation, improve stakeholder confidence, support cost-efficient operations and address challenges confronting Nigerian operators.
Mr. Omosehin said that the agreement represents “not only the strengthening of institutional cooperation, but also a clear affirmation of a shared regulatory commitment to the safety, integrity, and resilience of the Nigerian aviation ecosystem.”
Given the nature of aviation operations, he said insurance should not be viewed merely as a regulatory requirement but as an essential risk-management instrument protecting passengers, property and businesses across the wider economy.
“We are laying the foundation of what I call the stronger framework of cooperation that will ultimately benefit the aviation sector, that will benefit the insurance industry, and, overall, the Nigerian economy,” he said.
Mrs. Olayinka Babaoye-Iriobe, Director, Air Transport Regulation at the NCAA, said that the effectiveness of the MoU would depend on adequate underwriting capacity, contract certainty, appropriate risk retention and effective regulatory compliance and enforcement.
NUMBERS:
The immediate significance is less about a new numerical target than about the regulatory architecture being put in place.
The MoU brings together two regulators around a critical risk-transfer mechanism for an industry where individual incidents can generate liabilities far beyond the balance sheet capacity of operators.
It also formalises a Joint Technical Committee, creating a dedicated mechanism for continuous technical coordination rather than relying solely on periodic inter-agency engagement.
SIGNIFICANCE:
For airlines, aircraft owners, lessors, financiers and insurers, the quality of aviation insurance is ultimately a question of financial certainty.
Insurance that is inadequate, invalid, poorly structured or difficult to enforce can leave operators exposed precisely when their liabilities are greatest. Stronger regulatory coordination can therefore reduce uncertainty around policy adequacy and claims protection while improving confidence among aviation financiers and lessors.
Babaoye-Iriobe said that the framework could improve contract certainty, promote access to aircraft leasing and financing, and strengthen the financial resilience of Nigerian aviation operators.
Omosehin also stressed the human and economic dimension of adequate insurance, noting that after a serious aviation accident, the protection provided must be sufficiently resilient to support affected families as well as impacted businesses and entities.
NEXT MOVE:
The immediate test is whether the Joint Technical Committee translates the MoU into measurable regulatory outcomes.
Key areas to watch include the quality and adequacy of aviation insurance policies, underwriting capacity within the Nigerian insurance market, risk retention arrangements, compliance by operators, enforcement effectiveness and the ability of the framework to respond to emerging aviation risks.
The other important test is whether stronger insurance certainty improves the operating environment for aircraft leasing, financing and investment.
OUR LENS:
The deeper signal is that aviation safety is increasingly being treated as a financial resilience issue, not simply an operational one.
Aviation regulation can prevent accidents and mitigate operational risks, but it cannot eliminate the financial consequences of a major incident. That requires a credible risk-transfer system capable of absorbing losses when prevention fails.
The NCAA-NAICOM framework therefore represents a shift from treating aviation insurance primarily as a compliance obligation to positioning it as part of the sector’s broader safety and financial infrastructure.
The real measure of success will not be the signing of the MoU, but whether it produces insurance arrangements that are adequately underwritten, enforceable and financially capable of standing behind Nigeria’s aviation ecosystem when high-impact risks materialise.
Ayo Susan is a journalist, covering business, society and emerging developments with an emphasis on credible and engaging storytelling.
Discover more from StakeBridge Media
Subscribe to get the latest posts sent to your email.