After Recapitalisation, NAICOM Turns to Digital Channels to Grow Nigeria’s Insurance Market

Following the  recapitalisation of Nigeria’s insurance industry, the National Insurance Commission (NAICOM) is shifting its focus to digital distribution, consumer education and financial inclusion to expand insurance access among young Nigerians, women, micro, small and medium-sized enterprises (MSMEs) and underserved communities.

The regulator launched the Insurance Sector Strengthening Programme (ISSP) in Abuja, marking a shift from strengthening insurers’ balance sheets to expanding distribution, improving customer experience and increasing insurance penetration.

NAICOM Commissioner for Insurance and Chief Executive Officer, Olusegun Omosehin, said the stronger capital base achieved through the recapitalisation must now translate into wider insurance coverage.

“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,” Mr Omosehin said.

He said insurers could no longer depend largely on physical offices in major cities as consumer behaviour increasingly shifts towards digital platforms.

According to him, insurers need to develop distribution and sales models capable of reaching Nigerians wherever they live and work, particularly younger consumers who increasingly rely on digital financial services.

Technology is expected to play a central role in the regulator’s new strategy, with insurers encouraged to adopt digital platforms, data-driven solutions and other innovations that can make insurance products easier to access.

Mr Omosehin said the industry needed to respond to changing consumer expectations.

“Consumers now expect convenience, transparency and products tailored to their individual needs,” he said.

He said digital transformation was therefore becoming increasingly important to the growth of the insurance industry, particularly as more Nigerians interact with financial services through technology.

The regulator also plans to expand insurance awareness beyond major urban centres into rural and underserved communities, where limited understanding of insurance remains a major barrier to adoption.

Mr Omosehin said Nigerians needed to see insurance as more than a premium payment, describing it as a financial protection tool capable of safeguarding incomes, businesses, property and other assets against unexpected losses.

The ISSP comes after NAICOM’s recapitalisation exercise, which saw 43 insurance and reinsurance companies meet the new minimum capital requirements.

The commission has subsequently commenced issuing new licences to qualifying operators.

Mr Omosehin said recapitalisation would have limited impact if insurers failed to convert their stronger financial capacity into increased insurance coverage.

He identified weak public awareness, limited trust, inadequate capacity and fragmented distribution networks as some of the factors constraining insurance penetration in Nigeria.

“The change in the capital base must be followed by proper distribution,” he said, stressing the need for insurers to develop frameworks that would allow the benefits of recapitalisation to reach more Nigerians.

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

Young Nigerians and women are among the priority groups under the programme, with NAICOM seeking insurance products and engagement models that better reflect their economic activities and financial needs.

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

Mr Omosehin said expanding insurance coverage would require the industry to understand the different needs of its potential customer base and develop products that respond to those needs.

The programme will also seek to strengthen insurance awareness among people and businesses that have traditionally had limited interaction with formal insurance providers.

While encouraging insurers to expand their customer base, NAICOM said market growth must not come at the expense of financial stability and consumer protection.

Mr Omosehin said the commission would continue to insist on solvency, transparency, ethical conduct, fair treatment of policyholders and prompt settlement of legitimate claims.

He also called for a change in the perception that insurers are more interested in collecting premiums than paying claims.

“We must change the perception that insurance companies are only interested in collecting premiums. Prompt and fair claims settlement would be critical to rebuilding public confidence,” he said.

For NAICOM, improving claims settlement is central to encouraging more Nigerians to purchase insurance and retain confidence in their policies.

The regulator’s post-recapitalisation strategy therefore combines digital distribution, financial inclusion, consumer education and stronger customer protection as it seeks to move insurance beyond its traditional customer base.