No insurance cover for airports, exposes FG to losses, compensation claims

•Provision for insurance removed in new NCAA regulation —  Experts

By Rosemary Iwunze

Indications have emerged that the Federal Government may shoulder the full financial burden arising from the recent fire incident at the international terminal of the Murtala Muhammed International Airport, following the apparent absence of insurance cover for Nigerian airports.

The airport is managed by the Federal Airports Authority of Nigeria, FAAN.

Findings by Financial Vanguard revealed that several months after the incident no insurance company has reported claims exposure or liability in relation to the airport fire disaster, raising concerns over the lack of insurance protection for critical aviation infrastructure in the country.

The development implies that government will not only finance the rehabilitation of the burnt terminal estimated at over one billion Naira, but will also be responsible for compensating affected victims and settling all medical expenses resulting from the incident.

The situation comes despite an earlier approval by the Federal Executive Council of N712.26 billion for the comprehensive rehabilitation of Terminal One of the airport before the fire outbreak.

Commissioner for Insurance, Mr. Olusegun Omosehin said that no insurance company has paid claims in respect of the airport fire incident.

He stated: “I am not aware of the entities that covered the airport. If there was cover on that property, claims must be paid. That is where we stand.”

Industry experts noted that while aviation regulations make it compulsory for all aircraft operating in the country to maintain insurance cover, there is no regulatory requirement compelling airport operators to insure airport terminals and related infrastructure.

The development has again brought to the fore concerns over risk management practices in the aviation sector, especially with regard to protection of strategic national assets against fire and other operational hazards.

Financial performance

At the backdrop of non-coverage of the airport infrastructure, Financial Vanguard findings indicate steady growth in the combined aviation and marine insurance premiums.

But industry operators said most of the premium comes from the marine segment, while aviation premium is mostly from aircraft covers.

The strongest growth in the past five years came in 2024. While the insurance industry total premium expanded by 50 aviation and marine insurance premium surged by 73.9 per cent to N128.2 billion from N73.7 billion. Claims profile rose significantly during the year as aviation and marine claims rose by 106 per cent to N64.2 billion from N31.1 billion.

In 2025, the industry sustained its expansion trajectory as total premium income increased by 47.5 per cent while aviation and marine insurance premium rose by 45.9 per cent to N187.1 billion from N128.2 billion.

Operators’ insight

Speaking on the aviation segment insurance both aviation and insurance experts lament that the airports are not insured.

An aviation analyst, Grp. Capt. John Ojikutu, retd, stated that the absence of comprehensive insurance coverage for these airports could expose government to huge financial losses and compensation claims in the event of major disasters.

Ojikutu stated: “Statutory regulatory requirements should mandate airports to have a comprehensive insurance cover but that is not the case in the country today.

“Earlier provisions of the Nigerian Civil Aviation Regulations required international airports to maintain insurance coverage of about $250 million, while domestic airports were expected to carry coverage of around $100 million. “The regulations that came out in 2012, which were reviewed in 2022, made provision for our international airports to be insured for $250 million.

“However, in the new regulation, the insurance is not there. Whose fault? I will hold the Nigerian Civil Aviation Authority, NCAA, responsible.

“The impact of an uninsured airport would be huge financially, especially for government. Government would have to start allocating large sums of money to rebuild such infrastructure. Those who do business at the facility could also be forced out of business.”

Also speaking, former General Manager, Public Affairs for defunct Nigeria Airways, Mr. Chris Aligbe, who is now Chief Executive Officer of Belujane Konzult, stated that it is important that airports are insured.

He said: “It is very important that we insure our airports because in other countries, the amount of money that is being used to develop or renovate airports is usually not spent by governments these days.

“A few countries, who have money to spend, like the Middle East countries do. In Africa, there is Angola. Angola is an oil producing country, but I think it is not even doing so itself.

“Some other West African countries have done theirs themselves, but these are countries with just one airport. Their population is not very large, but the fact is that while new developments have shown that concession is one of the best ways to finance airport development, these airports must be insured.”

Also speaking, Mr. Sunny Adeda, former President of the Chartered Insurance Institute of Nigeria, CIIN, said that aviation as an industry is international in nature and therefore aviation insurance is affected in the international market more than any other branch of insurance.

He said: “The Nigeria aviation sector ensures that every aircraft operating in the Nigeria airspace is insured, but such cannot be said of the airports.

“Aircrafts are high valued and therefore value at risk is quite high. You need an insurer with a lot of financial strength to play in this class of business.

“Even locally, strict regulations by the insurance regulator are in place for any operator that wants to participate in aviation business.

“The current local legislation in Nigeria is the Nigerian Civil Aviation Authority (NCAA). A carrier must submit his insurance certificate to the NCAA before they can operate a domestic flight.

“Civil aviation is a highly regulated industry all over the world. In Nigeria the NCAA is the regulator. Every single technical personnel, equipment and airport must be certified and monitored by competent regulatory agencies. NCAA oversees the activities of all airlines, their pilots and crew, airport, navigation aids, all service providers including training institutions.

“The NCAA issues guideline requirements for grant of Airline Operating Permit, AOP. Amongst other requirement is that every airline operator providing air transport services for hire/reward must have adequate insurance for passenger/cargo and third party.

“While these strict regulations are in place to keep airlines in check, the regulation of the airports is just left to the whims and caprices of FAAN, which is not supposed to be so.”

Also speaking, a former President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Babajide Olatunde-Agbeja, said that the airports used to be insured about 10-12 years ago, but he is not certain about the current status.

Olatunde-Agbeja said: “I recall that the airports used to be insured about 10-12 years ago, but I cannot say for certain now. Consequently, the full brunt of renovating the airport will fall on the shoulders of government, which shouldn’t be.

“Look at all the fires that are happening in the markets. Markets are not insured. And everything falls on government. In many instances, state governments would say, ‘don’t worry, we will rebuild the market’. But what of the contents lost? The billions of Naira of contents lost in those market fires?

“We need to ensure that government assets are insured. When I was president of NCRIB, we liaised with government and they issued a circular mandating all parastatals, ministries, departments, and agencies to ensure that all government assets are insured. I don’t see any reason why government assets should not be insured. Government must insure all their assets, personnel, and liability.”

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