“For years, lessors required offshore underwriting, and over 95 percent of aviation insurance premiums left Nigeria. This new model strikes a balance,” said Omosehin. “Operators can now cede up to 90 percent of their risk internationally but still meet local regulatory expectations.”
BY ANTHONY OMOH
To stabilise local aviation insurance market, the Federal Government has approved a model allowing airlines to cede up to 90 percent of their aviation insurance to international underwriters.
The new regulation was announced in Abuja by the National Insurance Commission (NAICOM) in collaboration with the Federal Ministry of Aviation and Aerospace Development. It is a strategic shift captured by the Revised Insurance Regulation on Leased aircraft is aimed at unlocking access to aircraft leasing for Nigerian airlines while preserving a stake for domestic insurers.
Commissioner for Insurance, Olusegun Omosehin, explained that the updated regulation resolves long-standing challenges that made it difficult for local carriers to lease aircraft due to foreign insurance restrictions.
“For years, lessors required offshore underwriting, and over 95 percent of aviation insurance premiums left Nigeria. This new model strikes a balance,” said Omosehin. “Operators can now cede up to 90 percent of their risk internationally but still meet local regulatory expectations.”
He said the initiative would boost investor confidence in Nigeria’s insurance environment while enabling local firms to grow within the aviation risk space.
“This regulation provides operational clarity and underwriting comfort for local carriers, allowing them to engage with lessors under globally recognised terms while staying compliant with Nigerian insurance law,” he stated.
According to Omosehin, the framework is part of a broader government strategy to support the aviation value chain and reduce the cost of air travel for Nigerians. The goal is to allow operators to expand fleet size via leasing arrangements without being held back by inflexible insurance barriers.
“With more aircraft available through leasing, Nigerians can expect lower airfares, more routes, and better frequencies,” he added.
Minister of Aviation and Aerospace Development, Festus Keyamo (SAN), described the regulation as a homegrown policy that meets global expectations.
“What we’ve created is a Nigerian solution that’s completely aligned with international aviation and finance standards,” Keyamo said.
He revealed that a dedicated Working Group had collaborated with international lessors, reinsurers, and financiers to shape the final regulation. The result is a framework that aligns with key international conventions such as the Cape Town Convention (CTC) and the Irrevocable Deregistration and Export Request Authorisation (IDERA).
“These conventions are about trust and transparency. Lessors need assurance that their aircraft can be recovered swiftly. This policy supports that,” said Keyamo.
The updated insurance rule also aims to make the Nigerian aviation sector more competitive by enhancing the ease of doing business.
Dr. Adetayo John-Fisher, Managing Director of First Standard Insurance Brokers Limited, praised the regulation as a vital step toward repositioning Nigeria in the global aircraft leasing market.
“This is a turning point. It opens up leasing channels and fosters a healthier, more competitive aviation insurance ecosystem,” he said.
Obiora Okonkwo, Executive Chairman of United Nigeria Airlines and representative of the Airline Operators of Nigeria (AON), urged for efficient execution.
“The success of this regulation depends on seamless implementation. We must avoid bureaucratic delays that could discourage lessors,” Okonkwo warned.
Princess Zahrah Mustapha-Audu, Director-General of the Presidential Enabling Business Environment Council (PEBEC), also lauded the initiative. She called on airlines to improve service delivery to match the operational boost expected from easier access to aircraft.
“Regulatory innovation must lead to improved passenger experience,” she said.
Industry observers say the permission to cede up to 90 percent of aviation insurance is likely to attract more aircraft into Nigerian airspace. It lowers the risk for lessors, aligns with global practices, and strengthens local underwriting through required participation.
Ultimately, the regulation is a deliberate effort to stabilise the local aviation insurance market, reduce air travel costs, and align Nigeria’s aviation sector with global leasing norms.
