Nigeria: NAICOM shifts focus to insurance penetration after recapitalisation

Nigeria’s insurance regulator has shifted its attention from strengthening insurers’ capital base to expanding market penetration, following the completion of the industry’s recapitalisation exercise.

The National Insurance Commission (NAICOM) has launched the Insurance Sector Strengthening Programme (ISSP)in Abuja, with a focus on bringing more young Nigerians, women, micro, small and medium-sized enterprises (MSMEs) and underserved communities into the formal insurance market.

Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, said the industry must now translate the stronger financial position achieved through recapitalisation into wider distribution, improved products and better customer experiences.

NAICOM targets wider insurance distribution

Omosehin said insurers could no longer rely primarily on physical branches concentrated in major urban centres as consumer behaviour increasingly moves towards digital channels.

He said the industry needed to develop distribution and sales models capable of reaching Nigerians wherever they live and work, particularly younger consumers who are increasingly comfortable using digital financial services.

“The focus in the last 12 months has been on the underwriting end. 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,” Omosehin said.

The ISSP follows the conclusion of NAICOM’s recapitalisation exercise, under which 43 insurance and reinsurance companies met the new minimum capital requirements. The regulator has since begun issuing new licences to qualifying operators.

Stronger balance sheets must translate into greater coverage

According to Omosehin, recapitalisation would have limited impact if insurers were unable to use their stronger financial capacity to expand coverage and serve a larger segment of the population.

He identified low public awareness, weak consumer trust, inadequate industry capacity and fragmented distribution networks among the factors continuing to limit insurance penetration in Nigeria.

The ISSP will therefore concentrate on six key areas: advocacy and awareness, insurance education, capacity development, gender inclusion, youth engagement, and MSME and value-chain development.

A major component of the programme will be expanding insurance education beyond Nigeria’s major cities, particularly in rural communities where limited understanding of insurance products remains a barrier to adoption.

Omosehin said Nigerians need to better understand insurance as a financial protection mechanism that can safeguard incomes, businesses, property and other assets against unexpected losses.

Digital platforms to drive insurance access

Technology is expected to play a central role in NAICOM’s market expansion strategy, with insurers encouraged to adopt digital platforms, data-driven solutions and other innovations that can simplify access to insurance products.

Omosehin said consumers increasingly expect convenience, transparency and products that reflect their individual circumstances, making digital transformation an important driver of future industry growth.

The regulator is also prioritising women and young Nigerians, with the programme expected to encourage insurance products and engagement models that better address their economic activities and financial needs.

MSMEs will receive particular attention because of their contribution to employment and economic activity, as well as their exposure to operational, financial and other business risks.

Consumer protection remains a priority

While pushing for wider insurance coverage, Omosehin warned that market expansion must not come at the expense of insurers’ financial stability or consumer protection.

He said NAICOM would continue to enforce standards around solvency, transparency, ethical conduct, fair treatment of policyholders and prompt settlement of legitimate claims.

The commissioner also called for a shift in public perception that insurers are primarily interested in collecting premiums rather than paying claims.

According to him, improving claims settlement will be critical to rebuilding consumer confidence and strengthening trust in the insurance industry.

As the ISSP takes effect, the regulator’s challenge will be to ensure that the capital strengthened through recapitalisation translates into a more accessible, digitally enabled and trusted insurance market capable of reaching underserved Nigerians.