When an aircraft overshoots a runway, it is more than just a technical error, it becomes a moment of reckoning for the entire aviation ecosystem. From the pilots and engineers to regulators, insurers, and passengers, such incidents test the strength of every layer that holds the industry together.
This was precisely the case when an Air Peace aircraft skidded off the runway at Port Harcourt International Airport earlier this year, echoing a similar incident involving Dana Air at the same airport a few years ago. Though no lives were lost in either event, both occurrences reignited a vital national conversation — one that ties together two seemingly separate issues: aviation safety and insurance coverage.
Today, experts and regulators agree that safety and insurance are inseparable pillars of sustainable aviation, and the path to a stronger industry must involve empowering local insurance underwriters to play a more active role in aviation risk coverage.
Runway Scares that Sparked National Reflection
In the Air Peace incident, passengers described the experience as terrifying but miraculous. The aircraft, arriving from Lagos, reportedly veered off the runway due to heavy rainfall and poor visibility. Emergency responders from the Federal Airports Authority of Nigeria (FAAN) and airport fire and rescue teams were quick to react, safely evacuating all passengers and preventing a potential tragedy.
A few years earlier, Dana Air experienced a similar scare at the same Port Harcourt airport when one of its aircraft overshot the runway during landing amid adverse weather conditions. Again, passengers escaped unhurt, but the aircraft sustained structural damage.
ValueJet Aircraft Overshoots Runway at Port Harcourt Airport, according to the report on Tuesday slipped off the runway while taxiing after landing at the Port Harcourt International Airport in Rivers State, South-south Nigeria.
The aircraft, a CRJ 900 Bombardier with registration number 5N – BXR which had 67 passengers and five crew members on board landed around 3:30 p.m., Thisday newspaper reported.
These events triggered questions not only about runway safety and airport infrastructure but also about the readiness of insurance coverage to respond in such emergencies. In both cases, insurers had to assess hull damage, passenger compensation, and potential regulatory liabilities — a process that revealed the complexities of aviation risk management in Nigeria.
While accidents can occur even in the most advanced aviation systems, analysts argue that what distinguishes sustainable systems from fragile ones is the strength of their financial protection mechanisms — namely, how well the aircraft, operators, and passengers are insured.
The Invisible Engine Behind Safety: Why Insurance Matters
Aviation insurance is one of the most specialized and high-stakes sectors in global finance. Every aircraft carries not only passengers but enormous financial exposure. From maintenance hangars to ground operations and flight crews, the liabilities are immense.
Chief Babajide Olatunde-Agbeja, Chairman of Boff & Co. Insurance Brokers Ltd., once noted that “aviation insurance is not merely a piece of paper — it is the silent assurance that the system will not collapse after an accident.”
His words underscore a truth that many in Nigeria’s aviation industry are beginning to acknowledge: without adequate insurance, there can be no true safety.
When airlines maintain comprehensive coverage — including hull, passenger liability, third-party liability, and loss-of-license policies — they can operate with confidence, knowing that potential risks are mitigated. But when coverage is minimal or outdated, the consequences can ripple far beyond the airline, affecting passengers, regulators, and the nation’s reputation in the global aviation community.
The Challenge: Limited Local Participation in Aviation Insurance
Despite decades of aviation growth, Nigeria’s local insurance market remains underrepresented in aviation risk coverage. Most airlines rely on foreign reinsurers to underwrite their major risks, often due to limited capital and technical capacity among domestic insurers.
This dependence results in capital flight — millions of dollars leaving Nigeria annually in reinsurance premiums. More critically, it also delays claim settlements, as international reinsurers must go through multiple layers of verification before payouts are approved.
According to the National Insurance Commission (NAICOM), Nigerian insurers currently retain only a small percentage of aviation risk exposure. The rest is ceded to foreign reinsurers, mostly in Europe and the Middle East.
Mr. Olusegun Ayo Omosehin, the Commissioner for Insurance, has made it a policy priority to reverse this trend. At the 4th Chinet Aviacargo Conference, he emphasized that “for Nigeria’s aviation sector to be truly sustainable, our local underwriters must be trusted and empowered to take on aviation risks confidently.”
Omosehin explained that NAICOM is implementing reforms aimed at boosting local underwriting capacity, developing technical expertise in aviation risk assessment, and fostering collaboration between domestic and foreign insurers. These initiatives, he said, will not only strengthen Nigeria’s financial ecosystem but also ensure that aviation insurance directly supports safety improvements and operational stability.
Safety and Insurance: Two Sides of the Same Coin
To the average passenger, insurance may seem distant or abstract, but in reality, it determines how well the aviation sector can recover from shocks. Without insurance, airlines face enormous pressure after accidents — often leading to bankruptcy, layoffs, or long legal disputes.
“An underinsured or uninsured airline is a safety risk to itself and to the entire aviation ecosystem,” says Olatunde-Agbeja. “Insurance ensures continuity — it allows airlines to focus on compliance, maintenance, and passenger safety, rather than financial survival.”
This sentiment is shared by investigators at the Nigerian Safety Investigation Bureau (NSIB), who view insurance as an essential part of aviation risk management. Every incident, they argue, should be followed by a financial review — assessing whether coverage levels match operational realities.
In the case of the Air Peace, Valuejet, and Dana Air overshoot incidents, insurance policies were activated to cover aircraft repair, passenger claims, and operational disruptions. But experts believe that if more of these policies were underwritten locally, the process could be faster, more transparent, and beneficial to the Nigerian economy.
Empowering Local Underwriters for a Sustainable Future
Industry insiders argue that Nigeria can no longer afford to sit on the sidelines of the global aviation insurance market. With the right regulatory framework, capital investment, and technical training, local underwriters can play a transformative role in aviation safety.
NAICOM’s ongoing initiatives include the creation of aviation risk pools — where several Nigerian insurers combine resources to share large-scale risks. This approach spreads liability, increases collective capacity, and helps insurers learn from one another while reducing overreliance on foreign reinsurance.
Moreover, collaboration with international reinsurance firms is expected to facilitate knowledge transfer, helping Nigerian insurers develop in-house expertise on complex areas like hull valuation, flight data analytics, and claims investigation.
The Commissioner for Insurance also disclosed that NAICOM is working closely with the Nigerian Civil Aviation Authority (NCAA) to ensure every operating airline maintains updated and verifiable insurance policies, in line with both national and international regulations.
Such synergy, he said, will not only enforce compliance but also strengthen the link between financial risk management and operational safety — the very foundation of sustainable aviation.
Economic and Safety Gains for Nigeria
Beyond safety, expanding local participation in aviation insurance carries significant economic benefits. Nigeria loses an estimated $50–$80 million annually through offshore reinsurance of aviation risks. By retaining even a fraction of this value locally, the insurance sector could inject liquidity into the economy, create jobs, and build institutional expertise.
Stronger local underwriting would also make claims settlement faster and more accountable. For passengers, it means timely compensation in case of disruptions or accidents. For airlines, it means having a responsive partner that understands the Nigerian context and can act swiftly when needed.
And for the government, it translates to greater economic sovereignty — keeping financial value within Nigeria’s borders while ensuring compliance with global safety standards.
Expert View: Building Confidence Through Insurance
According to Celestine Ukpong, a Lagos-based economist and investment strategist, the aviation ecosystem must begin to see insurance not as an afterthought but as a strategic enabler of business confidence and sustainability.
“The aviation sector can leverage insurance policies to build strong confidence in its operations,” Ukpong explained. “When stakeholders — from passengers to investors — are assured that every flight and asset is properly insured, it creates a stable foundation for growth, trust, and investment in the industry.”
Ukpong’s perspective underscores the growing recognition that financial security is directly tied to operational safety. As airlines, regulators, and insurers work to align their interests, the role of insurance as both a risk management tool and a confidence-building mechanism becomes even more critical to the sector’s long-term sustainability.
Lessons from the Runway
The Air Peace and Dana Air incidents were not merely operational mishaps; they were moments of reflection. They showed that aviation safety is not only about runways and weather forecasts — it is equally about financial preparedness and systemic resilience.
When safety and insurance work hand-in-hand, the result is a more stable and sustainable aviation industry. But when one is neglected, the consequences can be catastrophic.
As Nigeria positions itself to become West Africa’s aviation hub, the nation must prioritize building local insurance capacity, enforcing global best practices, and ensuring that every aircraft flying under its flag operates under full, transparent, and effective insurance coverage.
In the words of one aviation analyst, “Every safe landing begins long before takeoff — in the insurance office.”
That truth, though often unseen by the flying public, is the lifeblood of modern aviation. For Nigeria, strengthening this foundation will determine whether its skies remain safe, its airlines sustainable, and its economy resilient.
Recent incidents involving Air Peace and Dana Air have reignited industry-wide conversations on the need for stronger local aviation insurance participation in Nigeria. Experts say safety and insurance are inseparable pillars of sustainable aviation growth.
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