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The Nigerian insurance industry may soon face a new wave of recapitalisation as the National Insurance Commission (NAICOM) unveils a comprehensive plan to enhance regulatory oversight and improve industry efficiency.
This potential recapitalisation, which could occur within the next two years, follows years of legal delays that stalled previous efforts. If implemented, the insurance sector will likely need to compete with the banking industry for limited capital resources.
As part of its strategy to strengthen the financial stability of insurance operators, NAICOM has hinted at the possibility of imposing new capital requirements on industry players.
Speaking at an interactive session with journalists in Lagos, the Commissioner for Insurance, Olusegun Omosehin, expressed concern over the public’s poor perception of the insurance sector. He highlighted NAICOM’s new strategic priorities, designed to guide the agency’s efforts to regulate, supervise, and develop Nigeria’s insurance market.
Reflecting on his transition from a profit-driven private sector career to his new role in public service, Omosehin acknowledged the significant mindset shift required to prioritize public welfare and consumer protection over profitability. “In my previous roles, the focus was on profitability and sustainability,” he noted. “But with my new appointment as the leader of NAICOM, my priorities have had to change drastically. The first step is unlearning those profitability motives and relearning the importance of serving the public and defending the interests of insurance consumers in Nigeria.”
Omosehin also revealed that, in his first three months as Commissioner, he has engaged in extensive consultations with key stakeholders, including the Nigerian Reinsurance Corporation (NRC), the Nigerian Council of Registered Insurance Brokers (NCRIB), lawmakers overseeing the insurance sector, and consumer advocacy groups. “These discussions have culminated in a strategic blueprint that will shape the future of the insurance sector in Nigeria,” he said.
The Commissioner acknowledged the declining trust in the insurance industry, largely due to the failure of underwriting firms to meet their obligations. He emphasized that protecting policyholders’ interests is now NAICOM’s top priority. “By protecting policyholders, we believe we can rebuild the public’s trust in our industry,” Omosehin stated.
He also highlighted the need to bolster NAICOM’s internal capabilities and strengthen the legal framework to enable more effective regulatory action. “We want NAICOM to have the same kind of powers that other financial regulators, such as the Central Bank of Nigeria (CBN), possess,” he explained.
In addressing the financial stability of insurance operators, Omosehin suggested that NAICOM might consider raising the minimum capital requirements to fortify the sector’s financial soundness. He also identified innovation as a critical driver of growth and announced plans to establish a new directorate dedicated to fostering innovative ideas within the industry. “We believe that innovation is key to driving growth and development in the insurance sector,” Omosehin remarked.
Improving accessibility and penetration of insurance services is another key focus, which includes enforcing compulsory insurance policies and ensuring that a larger segment of the population benefits from insurance coverage.
Omosehin further underscored the media’s role in shaping public perception of the insurance industry. He expressed optimism about NAICOM’s future and the insurance sector, believing that the groundwork laid in recent months will lead to significant improvements in public trust and industry stability.
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