Post-Recapitalisation: NAICOM Demands Stronger Ethics, Claims Settlement From Insurers

Olufemi Adeyemi The National Insurance Commission (NAICOM) has warned insurance operators against compromising prudential standards, ethical conduct and consumer protection as the industry enters a new phase following the completion of its recapitalisation exercise. The Commissioner for Insurance, Mr Olusegun Omosehin, issued the warning in Abuja on Thursday at the launch of the Insurance Sector Strengthening Programme (ISSP), stressing that the success of the recapitalisation exercise would depend largely on how effectively operators translated stronger capital positions into improved service delivery and greater public confidence. Omosehin said the recapitalisation was a critical step towards strengthening the operational capacity and long-term growth of the Nigerian insurance industry. However, he cautioned that increased capital alone would not guarantee a stronger sector unless insurers also demonstrated professionalism, accountability, transparency and sound corporate governance. He said the regulator would continue to promote an environment that encourages innovation and market development, but would not compromise on rules designed to protect policyholders and maintain the stability of the insurance market. “As regulator, NAICOM will continue to create an enabling environment for innovation, but this commitment must be matched by strict adherence to prudential standards, ethical conduct, fair treatment of customers, and timely settlement of genuine claims. “Innovation will be encouraged, but not at the expense of consumer protection. Market expansion will be supported, but not at the expense of solvency, transparency, or public trust. “The ISSP provides a platform for regulators, insurers, intermediaries, technology providers, development partners, and consumers to work together in pursuit of these shared objectives.” The Commissioner said the post-recapitalisation phase should usher in a more disciplined and customer-focused insurance industry, with operators expected to place responsible underwriting, adequate capitalisation and effective governance at the centre of their business strategies. He also identified transparent operations, prompt settlement of legitimate claims and the delivery of measurable value to policyholders as essential requirements for rebuilding confidence in insurance. “NAICOM will continue to engage, support, and guide the industry; but we will also insist that every operator earns public confidence through compliance, professionalism, and service excellence,” Omosehin said. According to him, the commission’s mandate goes beyond regulating insurance companies. It also includes protecting policyholders, preserving market stability, enforcing sound market conduct and promoting the orderly development of the industry. He maintained that while regulation remained essential to the stability of the sector, sustainable growth would require collective responsibility from all stakeholders. Omosehin warned that expansion without discipline, transparency and accountability could undermine the very objectives the industry seeks to achieve. He therefore called for greater collaboration among regulators, insurers, intermediaries, technology providers, development partners and consumers to address the structural and operational challenges limiting insurance penetration in Nigeria. The Commissioner also highlighted the growing influence of technology on financial services, noting that rapid digital transformation had changed how products were developed, distributed and consumed. With customers increasingly demanding faster services, greater transparency and solutions tailored to their individual needs, he said insurance operators could no longer afford to remain disconnected from technological developments. “Customers now expect convenience, transparency, and personalised solutions. In this environment, the insurance industry must embrace innovation as a necessity. “The integration of digital platforms, insurtech solutions, and data-driven approaches under the ISSP framework will help position the Nigerian insurance market for greater competitiveness in an increasingly digital economy,” he said. Omosehin described the ISSP as a landmark initiative designed to accelerate the transformation of Nigeria’s insurance landscape and strengthen the sector’s contribution to national development. He said the programme was expected to help make insurance more inclusive, innovative, resilient and trusted, while addressing some of the barriers that have continued to limit the industry’s reach across different segments of the Nigerian economy. The Commissioner said Nigeria’s insurance industry had considerable potential to play a larger role in economic development, particularly by providing financial protection, supporting businesses, mobilising long-term funds and helping individuals and enterprises manage risks. He urged industry stakeholders to sustain their commitment to the stability and long-term development of the sector, particularly at a time when technological changes, evolving consumer expectations and new business models were reshaping the financial services landscape. The ISSP, according to him, is structured around six critical pillars intended to address key priorities in the industry. These are Advocacy and Policy; Awareness and Education; Capacity Building; Gender Inclusion; Youth Engagement; and MSME and Value Chain Development. The six-pillar framework is expected to provide a coordinated approach to addressing policy and regulatory issues, improving public understanding of insurance, strengthening professional capacity and expanding participation in the sector. It also places emphasis on greater inclusion of women and young people, as well as stronger support for micro, small and medium-sized enterprises (MSMEs) and the wider value chains that underpin economic activity. Omosehin said the combined focus on regulation, innovation, inclusion and professional development would be critical to deepening insurance penetration and ensuring that the benefits of a stronger insurance industry reach more Nigerians. As the sector moves beyond recapitalisation, the regulator’s position signals that insurers will increasingly be judged not only by their financial strength, but also by their ability to operate responsibly, meet their obligations to policyholders and deliver quality services. The ISSP launch therefore marks what NAICOM considers a new phase for the industry—one in which stronger capitalisation must be matched by stronger institutions, better customer service, technological innovation and renewed public trust.