Nigeria: NAICOM targets wider insurance penetration after recapitalisation

The National Insurance Commission (NAICOM) has launched the Insurance Sector Strengthening Programme (ISSP), a new initiative aimed at expanding insurance coverage in Nigeria following the completion of the industry’s recapitalisation exercise.

The programme will focus on digital distribution, public awareness, youth engagement, gender inclusion, capacity building, and the development of micro, small and medium-sized enterprises (MSMEs) and value chains.

The initiative is designed to move the industry beyond strengthening insurers’ financial capacity towards expanding access to insurance for millions of Nigerians who remain uninsured or under-insured.

NAICOM shifts focus from capital to distribution

Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, said the industry could no longer depend primarily on large offices in major cities while overlooking changing consumer behaviour and the growing role of digital platforms.

He said insurers must develop distribution and sales models capable of reaching younger Nigerians and other underserved groups through channels that reflect how consumers increasingly access financial services.

“The focus in the last 12 months has been on the underwriting end,” Omosehin said, referring to the recapitalisation exercise. “Now it is the turn of the industry to help us channel proper distribution techniques and frameworks that will enable Nigeria to enjoy the benefits of the change.”

According to the Commissioner, insurers risk undermining the gains from recapitalisation if they fail to adapt to the changing expectations and behaviour of younger consumers.

“If we continue to focus more on building gigantic offices across the big cities and we do not understand the dynamics of how distribution, how sales and engagement with the youth is changing, everyone has lost it,” he said.

Stronger insurers expected to deepen market coverage

The ISSP comes after NAICOM completed the recapitalisation exercise, with 43 insurance and reinsurance companies meeting the new capital requirements. The Commission has also commenced the issuance of new licences to compliant operators.

Omosehin said the new programme would seek to ensure that stronger balance sheets translate into wider market coverage, improved products and better service for policyholders.

He described the ISSP as a landmark initiative intended to make Nigeria’s insurance industry more inclusive, innovative, resilient and trusted while increasing its contribution to national development.

Despite the size of Nigeria’s economy, insurance penetration remains relatively limited, with many individuals and businesses lacking adequate protection against financial and operational risks.

The Commissioner identified limited public awareness, trust deficits, capacity constraints and fragmented distribution channels among the factors holding back wider adoption.

Rather than viewing these challenges as permanent barriers, he said the industry should treat them as opportunities to develop new products, distribution models and customer engagement strategies.

Digital platforms to drive insurance access

Public education will form a major component of the ISSP, particularly in rural communities where limited knowledge of insurance products continues to restrict adoption.

Omosehin said insurance would struggle to become a widely used financial service unless Nigerians understood its practical value in protecting income, businesses, property and other assets against risks.

The programme will also promote digital platforms, technology-enabled solutions and data-driven approaches to make insurance products more accessible and responsive to consumer needs.

The Commissioner said changing customer expectations had made digital transformation a necessity for the sector.

“Customers now expect convenience, transparency and personalised solutions,” he said, stressing that insurers must adapt if they are to attract and retain new customers.

The digital focus aligns with NAICOM’s broader efforts to use insurtech to extend insurance distribution to underserved populations. In June, the Commission licensed an insurtech partner as part of efforts to strengthen digital access to insurance products.

Youth, women and MSMEs identified as growth priorities

Women and young people will receive particular attention under the ISSP because of their economic importance and potential to broaden the insurance customer base.

The programme will seek to bring these groups into the mainstream through products tailored to their needs, new engagement approaches and career development opportunities.

MSMEs are another key target of the initiative. Many small businesses operate with limited insurance protection despite their significant contribution to employment, productivity and innovation.

Omosehin said broader insurance coverage would help MSMEs withstand unexpected shocks, maintain business continuity and pursue sustainable growth.

NAICOM warns against sacrificing consumer protection

While encouraging innovation and market expansion, Omosehin warned operators that growth must not come at the expense of financial stability, ethical conduct or consumer protection.

He said NAICOM would continue to demand sound financial institutions, transparency, fair treatment of customers and prompt settlement of legitimate claims.

“Market expansion and innovation will be supported by the regulator, but not at the expense of solvency of our institutions, not at the expense of transparency or public trust,” he said.

The position reinforces the importance of the post-recapitalisation phase, with the stronger capital base expected to support better governance, increased competitiveness, new products and deeper insurance penetration.

Omosehin also called for an end to the perception that insurers are more interested in collecting premiums than paying legitimate claims.

He said policyholders must receive tangible value for the premiums they pay, making quality service and timely claims settlement central to rebuilding confidence in the industry.

“The era of Nigerians seeing us as very quick at collecting premiums and taking back seats when claims are reported should totally be from our national psyche,” he said.

Skills development becomes critical to industry transformation

The ISSP will also place emphasis on human capital development as technology continues to reshape financial services and customer expectations.

Omosehin said insurance professionals would require new technical and digital skills to operate effectively in an increasingly technology-driven market.

Training and professional development initiatives under the programme are expected to strengthen competence, professionalism and performance across the insurance value chain.

The Commissioner also linked the ISSP to the Nigeria Insurance Industry Reform Act 2025, saying the programme supports the legislation’s objectives of increasing insurance penetration, improving professionalism, encouraging innovation, strengthening consumer protection and increasing the sector’s contribution to the economy.

Senate backs insurance sector reforms

The National Assembly has backed the initiative, with Victor Inedu, representing the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Tokunbo Abiru, describing the programme as timely within Nigeria’s broader economic reform agenda.

He said a strong insurance sector was essential to protecting individuals and businesses, supporting investment, mobilising long-term capital and giving businesses the confidence to take risks and expand.

Abiru commended NAICOM for completing the recapitalisation exercise, describing it as an important step towards building stronger and more resilient insurers capable of underwriting larger risks and supporting major investments.

He said the new capital requirements should be viewed not simply as a regulatory obligation but as part of efforts to position the industry for a larger role in Nigeria’s economic development.

The senator also disclosed that the Senate had passed the Insurance Regulatory Commission Bill 2026 and expressed hope that the House of Representatives would pass the legislation in September.

According to him, the proposed legislation would further strengthen NAICOM and enhance its capacity to carry out its regulatory responsibilities.

However, Abiru cautioned that legislation and stronger regulation alone would not transform the industry.

“The real test lies in effective implementation,” he said, noting that reforms must translate into stronger institutions, improved governance, better consumer protection, greater innovation, higher insurance penetration and deeper public trust.

Stakeholder collaboration critical to ISSP success

The Senate representative called for greater cooperation among the legislature, executive, NAICOM, insurance companies, professionals, practitioners and the public.

Under the ISSP framework, NAICOM will provide policy direction and regulatory oversight, while operators are expected to develop innovative products and broader distribution channels.

Professional bodies will support standards and skills development, while development partners are expected to provide technical assistance. Educational institutions will contribute to talent development, while the media will play a role in improving public understanding of insurance.

The success of the post-recapitalisation era will therefore depend not only on stronger insurance companies, but also on whether the industry can convert increased financial capacity into accessible products, efficient digital distribution, stronger consumer protection and greater public trust.