NAICOM, PenCom Task Insurers, Pension Operators On Better Service After Recapitalisation

By Sola Alabadan

The National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) have urged insurance companies and pension operators to translate recapitalisation into stronger institutions, improved service delivery and greater financial security for Nigerians.

The regulators made the call at the 11th Annual Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE), held on Thursday in Lagos, with the theme, “Post-Recapitalisation Market Dynamics in Insurance and Pension Sectors.”

The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Olusegun Omosehin, said insurers must look beyond meeting minimum capital requirements to strengthening their balance sheets, improving risk management and ensuring prompt settlement of claims.

He described the successful completion of the insurance recapitalisation exercise as the beginning of a new phase for the industry, requiring operators to preserve and deploy their capital prudently.

Omosehin said insurers must align their assets with their liabilities to ensure that adequate, liquid and diversified investments were available to meet their obligations to policyholders.

He also called for disciplined investment policies, stronger corporate governance and improved risk management to protect the enhanced capital base of insurance companies.

According to him, increased capital would provide insurers with greater capacity to expand their businesses and underwrite larger risks, but warned that growth without adequate risk controls could undermine the gains of recapitalisation.

The commissioner identified risk-based supervision as a major regulatory priority, urging operators to strengthen enterprise risk management, actuarial capabilities and stress-testing frameworks as the industry moves towards risk-based capital requirements.

He said the ultimate measure of the success of recapitalisation would be its impact on policyholders, particularly through the prompt and efficient settlement of legitimate claims.

Omosehin stressed that improved claims payment was essential to rebuilding public confidence and encouraging greater participation in insurance.

He further urged insurers to strengthen board oversight, accountability, ethical leadership and regulatory compliance, noting that a stronger capital base must be supported by effective governance structures.

The NAICOM chief also identified technology, digital distribution and human capital development as critical drivers of growth, urging operators to invest in digital platforms, professional training and technical expertise.

He said actuarial science, investment management, technology and risk management were among the areas requiring stronger professional capabilities to manage larger balance sheets and increasingly complex risks.

Omosehin said recapitalisation should ultimately produce a more resilient, transparent, innovative and customer-focused insurance industry capable of contributing meaningfully to Nigeria’s economic development.

PenCom warns operators over capital requirements
Similarly, the Director-General of PenCom, Mrs Omolola Oloworaran, warned pension operators yet to meet the recapitalisation requirements to comply with the directive urgently.

“I’d like to make a warning to the industry. All those who have not met the recapitalisation in the pension industry, there’s no going back. Go and meet your capital requirements with urgency,” she said.

Oloworaran explained that recapitalisation was necessary to strengthen regulated institutions and improve their ability to withstand economic and financial shocks.

She said the reforms were particularly important because pension and insurance institutions managed resources critical to the livelihoods and financial security of Nigerians.

According to her, the objective of strengthening the pension industry was to ensure that contributors could retire with peace of mind and dignity.

The PenCom director-general stressed that recapitalisation should not merely produce bigger and more resilient institutions but should also lead to better service delivery and improved retirement outcomes.

She challenged regulators and industry stakeholders to continually assess whether reforms were delivering tangible benefits to Nigerians.

“Beyond recapitalisation, yes, industries are bigger, more resilient and all of that. But at the end of the day, the person, the human we exist to serve, is not feeling the impact. Then what is the importance of all the reforms we put out,” she said.

Oloworaran said PenCom was shifting its focus from merely accumulating pension assets to ensuring that the funds were deliberately and effectively allocated to generate better returns for contributors.

She also urged insurance and pension editors to hold regulators and operators accountable by asking critical questions about the effects of policies and reforms on Nigerians.

The PenCom chief commended NAIPE for providing a platform for dialogue among regulators, industry stakeholders and the media, adding that the commission would continue to deploy available regulatory tools to strengthen the pension system and build public confidence.

Custodian chief seeks stronger industry collaboration
Also speaking, the Group Managing Director and Chief Executive Officer of Custodian Investment Plc, Mr Wale Oshin, called for stronger collaboration between insurance companies and pension operators to improve retirement security and protect retirees’ interests.

Oshin said cooperation between the two industries should extend beyond regulators to operators and other stakeholders to ensure better outcomes for retirees and annuity holders.

He said recapitalisation offered an opportunity to strengthen institutions, improve financial resilience, support investment in technology and enhance operators’ capacity to meet long-term obligations.

However, he cautioned that raising capital alone was insufficient, noting that the real value of the exercise would be determined by the quality of services and benefits delivered to customers.

Oshin urged insurance companies and pension operators to focus on building sustainable businesses rather than merely meeting regulatory requirements.

He also called for greater attention to annuities and retirement income, warning that inadequate retirement benefits could undermine public confidence in the pension system.

The Custodian Investment chief executive commended regulators and industry stakeholders for their efforts to build stronger institutions, urging sustained engagement to address emerging challenges in the insurance and pension sectors.

NAIPE urges prudent investment of recapitalised funds
Earlier, the Chairman of NAIPE, Ebere Nwoji, said the recapitalisation of Nigeria’s insurance and pension sectors would strengthen their capacity to support individuals, businesses and the wider economy.

In her welcome address, Nwoji said the substantial capital raised by operators in both sectors must be deployed prudently to generate stronger returns for investors and contribute meaningfully to economic growth.

She noted that the recently concluded insurance recapitalisation exercise had placed insurance companies in a stronger position to underwrite bigger risks and provide greater protection for Nigerians and businesses.

Nwoji therefore urged Nigerians to take advantage of the improved financial strength of insurance companies by purchasing appropriate insurance policies.

She said effective risk transfer through insurance would provide greater financial security for individuals, families and businesses.

On the pension sector, she said the ongoing recapitalisation exercise, expected to be concluded by July 2027, offered an opportunity to build a stronger retirement system for Nigerian workers.

She expressed optimism that the exercise, alongside other reforms, would improve the capacity of Pension Fund Administrators (PFAs) to safeguard workers’ retirement savings and generate better returns, ultimately helping Nigerians achieve greater financial security after their years of service.

Nwoji stressed that the enlarged capital base in both sectors must be invested wisely and prudently to deliver sustainable returns.

She said the success of the reforms would ultimately depend on the ability of insurance and pension operators to convert their stronger financial positions into tangible benefits for policyholders, pension contributors, retirees and the Nigerian economy.