Nigeria’s insurance industry is under increasing regulatory pressure as the National Insurance Commission intensifies reforms aimed at improving claims settlement, strengthening capital bases and expanding market reach.
At a recent meeting of the Nigerian Insurers Committee, the regulator signalled a decisive shift toward a more responsive, transparent and growth-oriented sector, warning that longstanding issues such as delayed claims, weak capitalisation and limited penetration must be addressed.
A key focus of the reforms is the prompt settlement of claims, widely regarded as a major factor undermining public trust in the industry.
Speaking to journalists after the meeting, Chairperson of the Communications and Stakeholders Engagement Sub-Committee, Ebelechukwu Nwachukwu, said the Commissioner for Insurance, Olusegun Ayo Omosehin, acknowledged improvements in large claims payments but stressed the need for consistency across all categories.
“Claims payment remains the strongest measure of credibility in the industry and must be treated as a non-negotiable obligation,” she said.
Beyond rebuilding trust, NAICOM is also opening new business opportunities for insurers, particularly through a planned partnership with the Bureau of Public Procurement. The initiative will introduce compulsory insurance-backed guarantees—such as bid bonds and advance payment bonds—for government contracts.
Under the arrangement, contractors bidding for public sector projects will be required to secure insurance guarantees, positioning insurers as key players in public procurement financing.
Nwachukwu noted that operators have been directed to upgrade their internal systems to support efficient bond issuance and timely claims processing, especially when guarantees are triggered.
The commission is also pushing insurers to expand into underdeveloped segments, particularly the protection component of health insurance. While Health Maintenance Organisations currently dominate service delivery, NAICOM believes insurers can play a larger role in risk protection and long-term coverage.
To support this expansion, the regulator has issued draft guidelines on the Policyholders’ Protection Fund for International Private Medical Insurance, signalling stronger consumer protection measures in the health insurance space.
However, concerns remain over the slow pace of recapitalisation within the industry. Although about 20 firms have initiated capital verification discussions with NAICOM, only 16 have progressed to active review stages.
Omosehin warned that operators must accelerate compliance efforts as regulatory deadlines approach, noting that delays could undermine the broader reform agenda.
The commission also reiterated the April 30, 2026 deadline for full compliance with Know-Your-Customer (KYC) requirements, urging insurers to strengthen customer data management systems.
Meanwhile, wider reforms under the Nigerian Insurance Reform Agenda are gaining momentum, with industry stakeholders focusing on compulsory insurance enforcement, digital transformation and financial inclusion.
Looking ahead, the sector is positioning to leverage opportunities under the African Continental Free Trade Area, which is opening new cross-border markets. Nwachukwu disclosed that Nigerian insurers have already attracted partnership interest from countries including Kenya, Mauritius, South Africa and the United Arab Emirates.
