NAICOM Affirms Stronger Capital, Innovation Key To Building Resilient Insurance Industry

Sola Alabadan

The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Olusegun Omosehin, has affirmed that stronger capitalisation, innovation, sound corporate governance and greater professionalism are required to build a resilient Nigerian insurance industry capable of withstanding emerging economic and systemic risks.

Omosehin stated this while speaking on Thursday in Abeokuta at the 2026 Insurance Professionals’ Forum with the theme “The Economics of Risk: Sustaining a Resilient Insurance Industry.”

He said Nigeria’s insurance industry was at a critical stage of development following recent regulatory reforms, particularly the implementation of the Nigeria Insurance Industry Reform Act (NIIRA) 2025.

According to him, the changing risk environment, characterised by economic volatility, climate-related disasters, technological disruption, demographic changes, cyber threats and geopolitical uncertainties, requires insurers to rethink traditional approaches to risk management.

He described insurance as more than a financial service, saying it was a strategic instrument for economic stability that enables individuals, businesses and governments to manage uncertainty and pursue productive activities.

“Insurance is the institutional mechanism through which societies transform uncertainty into confidence and convert vulnerability into resilience,” Omosehin said.

He noted that insurance supports economic growth by mobilising long-term savings, facilitating investment, protecting households, promoting entrepreneurship and strengthening financial stability.

He added that sectors such as agriculture, infrastructure, trade and energy depend heavily on effective insurance and risk-transfer mechanisms to attract investment and sustain operations.

The NAICOM chief said the architecture of risk was becoming increasingly interconnected, systemic and global, making it difficult for insurers to rely solely on historical loss data when assessing future exposures.

He cited climate change as a major factor altering catastrophe patterns, with floods, droughts, desertification, storms and environmental degradation producing increasingly severe and unpredictable losses.

Digital transformation, he added, had created new risks, particularly cyber threats capable of disrupting businesses, compromising critical infrastructure and generating significant financial losses.

Omosehin also pointed to the COVID-19 pandemic as evidence of the systemic nature of modern risks, saying the experience demonstrated that resilience required more than financial capital.

“Institutional agility, sound governance, operational preparedness and strategic foresight” were equally essential to ensuring resilience, he said.

He urged insurers to incorporate predictive analytics, enterprise risk management, scenario modelling, climate intelligence and other advanced technologies into their decision-making processes.

Omosehin said effective regulation remained critical to the sustainable growth of the insurance market, noting that modern regulation should go beyond compliance enforcement to focus on financial stability, policyholder protection, market conduct and institutional resilience.

He said NIIRA 2025 represented the beginning of a new era for Nigeria’s insurance industry rather than the conclusion of the reform process.

He listed policyholder protection, financial soundness, stronger corporate governance, improved market conduct, innovation, insurance inclusion and market stability as key pillars of NAICOM’s regulatory approach.

On the industry’s recapitalisation exercise, the commissioner said the initiative was not merely designed to raise minimum capital requirements, but to strengthen institutional capacity and market resilience.

According to him, stronger capital bases would enable insurers to retain larger risks, settle claims more efficiently, invest in technology and human capital, support innovation and participate in major national projects.

“The true measure of recapitalisation therefore lies not in balance sheet expansion alone, but in the creation of stronger, more resilient institutions capable of delivering sustainable value to policyholders and the broader economy,” he said.

Omosehin identified public trust as the most valuable asset of the insurance industry, describing insurance fundamentally as a promise between insurers and policyholders.

He stressed that capital and technology could not compensate for a lack of confidence in insurers.

He therefore called for strong governance, ethical leadership, transparency, accountability, fair market conduct and prompt claims settlement across the industry.

He also highlighted the establishment of the Insurance Policyholders’ Protection Fund under NIIRA 2025 as an additional safety net for policyholders in situations involving insurer distress.

However, he said prevention should remain the primary objective of regulation, with effective supervision, prudent risk management and sound corporate governance serving as the first line of defence against institutional failure.

The commissioner urged insurers to embrace emerging technologies, including artificial intelligence, machine learning, predictive analytics, blockchain, geospatial intelligence and digital platforms.

He said the future of the industry would increasingly depend on the ability of insurers to adapt to technological and market changes rather than simply their size.

“Digital transformation must therefore be viewed as a strategic imperative rather than an operational option,” he said, while stressing the need for safeguards around data protection, ethical technology deployment and consumer confidence.

Omosehin also emphasised the importance of human capital development, saying the growing complexity of risks required insurance professionals with expertise spanning actuarial science, economics, finance, data analytics, cybersecurity, climate risk, governance and enterprise risk management.

He urged the Chartered Insurance Institute of Nigeria to continue strengthening professional education, mandatory continuing professional development, compliance training, governance education and leadership development.

Omosehin identified the expansion of insurance penetration as one of the industry’s biggest economic opportunities, noting that millions of Nigerians remained uninsured or underinsured.

He said closing the protection gap would strengthen household and business resilience, support agricultural productivity, promote financial inclusion and contribute to poverty reduction and social stability.

He called for greater development of microinsurance, agricultural insurance, inclusive health protection and technology-enabled distribution platforms capable of reaching underserved populations.

“Insurance products must become more affordable, more accessible, more understandable, and more responsive to the realities of Nigerian consumers,” he said.

The commissioner further stressed that building a resilient insurance industry was a collective responsibility involving insurers, reinsurers, brokers, loss adjusters, technology providers, policymakers, professional bodies, educational institutions, development partners and consumers.

He said collaboration would be essential in addressing emerging challenges such as climate risk, cyber threats, catastrophe financing, infrastructure protection, financial inclusion and operational resilience.

Omosehin further urged the industry stakeholders to position insurance as a strategic catalyst for Nigeria’s economic transformation rather than merely a mechanism for indemnifying losses.

He expressed confidence that with shared vision, disciplined execution and sustained commitment, Nigeria could build an insurance industry capable not only of responding to future shocks but also of emerging stronger from them.