NAICOM Mandates Service Excellence Over Price Wars as Insurance Sector Undergoes Major Reforms
The National Insurance Commission (NAICOM) has issued a directive to insurance companies, urging a strategic pivot from competing on premium pricing to prioritising prompt claims settlement and superior service delivery. This directive comes as the Nigerian insurance industry braces for a new era of reforms, signalling a significant shift in regulatory expectations.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Ayo Omosehin, articulated this imperative on Friday in Abuja. His remarks were delivered during the investiture ceremony for Mrs. Ebelechukwu B. Nwachukwu, who has been installed as the 27th Chairman and the first female leader of the Nigerian Insurers Association (NIA).
Omosehin underscored that the industry’s most pressing challenge is no longer capital inadequacy but a profound deficit in public trust. He emphasised that the timely and equitable payment of claims is paramount to restoring confidence in the insurance sector. “Our biggest deficit is not capital. It is trust,” Omosehin stated, highlighting the critical need for a cultural transformation within the industry.
He implored insurers to embed “claims excellence” as a market-wide ethos. This involves ensuring the swift resolution of legitimate claims, maintaining transparent communication with policyholders, and demonstrating greater accountability in claims performance. “Every claim paid promptly, every policy explained clearly, every customer treated fairly, adds a block to the trust we must rebuild,” Omosehin urged. “Let us publish our claims ratios. Let us compete on service. Let the Nigerian people feel the difference.”
The Commissioner noted that Mrs. Nwachukwu’s investiture occurs at a pivotal moment, following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and the ongoing recapitalisation exercise. The deadline for this recapitalisation is July 31, 2026, a date expected to usher in a cohort of more robust and adequately capitalised insurance entities. These strengthened companies will be better positioned to underwrite larger risks and contribute significantly to Nigeria’s ambitious goal of achieving a $1 trillion economy by 2030. Omosehin clarified the purpose of recapitalisation: “This is not recapitalisation for its own sake. It is recapitalisation for capacity, for retention and for credibility.”
He expressed satisfaction with the progress operators have made in meeting the new minimum capital requirements, noting that capital verification exercises indicate that many institutions have already met or surpassed the stipulated thresholds. This enhanced financial strength, he added, will bolster the industry’s resilience and its capacity to play a more strategic role in fostering economic growth.
Furthermore, Omosehin called for enhanced collaboration between the NIA and NAICOM, alongside other stakeholders, to enforce compulsory insurance laws. He lamented that compliance rates remain below 30%, despite legal provisions mandating six classes of compulsory insurance. “The Commission cannot enforce alone. We need the market to insist on compliance as a condition for doing business,” he asserted. Insurers were encouraged to forge partnerships with state governments, the Federal Road Safety Corps, the Nigeria Police Force, and other enforcement agencies to improve compliance, thereby protecting lives, safeguarding public funds, and deepening insurance penetration.
Addressing innovation, the NAICOM boss pointed out that the industry’s penetration rate, still below one per cent, is partly attributable to products and distribution channels that have not adequately met the needs of millions of Nigerians. He advocated for insurers to leverage NAICOM’s Regulatory Sandbox and invest in digital distribution, embedded insurance, microinsurance, Takaful, and parametric insurance products, particularly those tailored for agriculture and climate-related risks. The objective, he stated, is to make insurance accessible to every farmer, trader, and household across the nation.
Omosehin assured industry operators of NAICOM’s commitment to fostering an enabling regulatory environment through risk-based supervision, robust corporate governance standards, and enhanced consumer protection, all within the framework of the new insurance reform law. However, he reiterated the commission’s unwavering stance on market conduct, solvency requirements, and the prompt settlement of claims.
Congratulating Mrs. Nwachukwu on her historic appointment as the first female NIA Chairman, Omosehin expressed confidence in her leadership to unite the market and steer the industry through its next transformative phase. He urged the new NIA chairman to champion stronger collaboration among operators, elevate standards in claims management, professionalism, and disclosure, and significantly expand insurance coverage to the millions of Nigerians who currently remain uninsured. “The laws have changed. The capital base is changing. Now, industry leadership must embrace its historic responsibility to transform how we serve the Nigerian people,” Omosehin concluded. He acknowledged the tenure of the outgoing NIA Chairman, Mr. Kunle Ahmed, for his substantial support in the passage of the Nigerian Insurance Industry Reform Act, 2025, and his sustained commitment to the industry’s development.
