Dana crash threatens Africa’s aviation insurance rating – AIBA

The African Insurance Brokers Association, a body of the African Insurance Organisation, has said that the crash of a Dana aircraft in Nigeria in June this year may lower the position of African aviation insurance sector in terms of global rating.

AIBA stated this in its newsletter, made available at the ongoing 18th Reinsurance Forum in Balaclava, Mauritius, on Tuesday.

The association stated, “The position of African aviation insurance sector to global market may dip further in the current year, following the volume of claims that will be coming from the recent crash in Lagos of the Dana aircraft that caused the death of many people.”

AIBA said that with this trend, analysis had indicated low level of risk management practice across different sectors in the business environment of Africa, if the comments of technical error from the Dana crash were anything to go by.

According to AIBA, Africa has less than 10 per cent of the world’s civil aviation traffic but with over 40 per cent of the total accident rate, which makes the accident rate to be completely disproportionate to the amount of flights.

The association said that this revealed the issues of aircraft in the region operating with less well-trained crews in less well regulated environment.

AIBA noted that in 2011, aviation claims from Africa stood at about $65m, due to the crash of two Congo Democratic civilian planes, leading to the death of 109 people, and Morocan Hercules Airforce plane Dolon, which caused the death of 80 people on board.

According to AIBA, in 2011, the global industry had the lowest aviation claims since1995, despite the fact that loss figures stood at $1.13m, from a figure of $2.09m in 2010.

It said that the African aviation insurance pool’s premium dropped by 32.4 per cent from $5.8m in 2010 to $3.9m in 2011.

Despite the drop in premium, AIBA said that the pool recorded $824,720 in 2011, from a lower record in 2010.

The Chairman, AIBA, Dr. Feyi Soyewo, said that during the association’s recent general meeting, it approved the adoption of its age long reinsurance broking project, known as Reinsurance Brokers of Africa Limited.

He said, “The incorporated limited liability company is to initially have a share capital of $2m with 50 per cent fully paid. The initial report has been forwarded to the secretary general for consideration and approval by the executive committee.”

 

 

 

 

Source: PUNCH