NIA: Insurance Companies in Nigeria Can Take Big Risks

Insurance companies in the country have the capacity to handle liabilities arising from the risk involved in any sector of the economy says the Nigerian Insurers Association (NIA).

On Monday, NIA director-general Yetunde Ilori stated this at a stakeholder’s conference organized by the Lagos State Safety Commission and the association to domesticate compulsory insurance on properties and public buildings in Lagos.

Ms Ilori spoke in reaction to a claim by Air Peace chairman Allen Onyema that all the insurance companies in Nigeria put together could not insure one aircraft.

Mr Onyema had said this at a stakeholders’ meeting with the deputy speaker of the House of Representatives, Ahmed Wase, last week whilst listing the challenges airline operators face in Nigeria.

He had stated that due to the inability of Nigerian insurers to provide full cover for their aircraft, airline operators had to patronize expensive overseas insurance.

Ms Ilori said anyone with such an idea or belief that the Nigerian insurance firms are not viable enough to bear any risk does not understand how insurance works.

She explained that insurance is a global business, and insurance companies take risks to the extent of their capacity.

“The re-insurers also take theirs to the extent of their capacity, as insurance is a global business. You will not be surprised that if you are insuring your terminal or banks in Nigeria, where the capacity in Nigeria is exhausted, it is also shared under what is Treaty Reinsurance,” she said.

Insurance companies are not trading with capital, and it is not how big they are that determines the extent of the risk they can bear according to Mrs. Ilori