NAICOM Positions Trust As The Critical Measure Of Nigeria Insurance Reform

By Ayo Susan

Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, has said at the 2026 Insurance Professionals’ Forum in Abeokuta, Ogun State, that stronger capital following industry recapitalisation must translate into greater policyholder confidence, stronger governance and better claims service. Operating under the Nigeria Insurance Industry Reform Act (NIIRA) 2025, insurers are expected to convert financial capacity into resilience, innovation and wider insurance access.

DECISION HIGHLIGHT

Omosehin is reframing recapitalisation as a means to strengthen trust and institutional resilience, rather than an end measured principally by larger balance sheets.

DECISION MEMO

The regulatory argument is that capital only becomes economically meaningful when policyholders can rely on insurers to perform under stress. In an industry whose product is fundamentally a promise of future payment, weak claims settlement or opaque conduct can erode the value created by recapitalisation.

“Policyholders pay premiums today based on confidence that insurers will honour valid obligations tomorrow,” Omosehin said, describing trust as “sacred” to insurance.

More pointedly, he stated: “No amount of capital, technology, or regulation can compensate for a deficit of trust.”

This places corporate governance, ethical leadership, transparency, accountability, fair market conduct and prompt claims settlement at the centre of the reform agenda. Omosehin said that the real measure of recapitalisation would be insurers’ ability to retain larger risks, settle legitimate claims efficiently, invest in technology and talent, and withstand economic stress.

“A resilient insurer is one that remains solvent during economic stress, honours its obligations during crises, and retains the confidence of policyholders under all circumstances,” he said.

The Insurance Policyholders’ Protection Fund under NIIRA 2025 provides an additional safety net, but Omosehin’s emphasis is preventative: effective risk management and governance should reduce the probability of institutional failure before intervention becomes necessary.

The broader challenge is adaptation. Climate disasters, cyber threats, technological disruption and inflation are expanding the risk landscape, requiring artificial intelligence, predictive analytics and digital platforms to improve underwriting, fraud detection and claims management without weakening data protection.

DATA BOX

• Regulatory framework: NIIRA 2025
• Reform milestone: Industry recapitalisation
• Safety mechanism: Insurance Policyholders’ Protection Fund
• Priority technologies: AI, predictive analytics and digital platforms
• Emerging risks: Climate, cyber, technology disruption and inflation
• Market challenge: Millions remain uninsured or underinsured

WHO WINS / WHO LOSES

Wins: Well-capitalised insurers with strong governance, efficient claims systems and technology capabilities are positioned to gain customer confidence and retain larger risks.

Losers: Operators relying on weak governance, poor claims execution or opaque market conduct face increasing regulatory and reputational pressure.

POLICY SIGNALS

NAICOM is signalling that capital reform will be judged through institutional behaviour and policyholder outcomes. Supervision, governance and claims discipline are therefore becoming central measures of sector resilience.

INVESTOR SIGNAL

The investment case increasingly depends on earnings quality, risk management and customer retention rather than capital size alone. Insurers able to combine financial strength with technology, efficient claims management and credible governance should have stronger long-term franchise value.

RISK RADAR

The principal risks are inadequate governance, claims failures, emerging climate and cyber exposures, data vulnerabilities and persistent underinsurance. The key indicator is whether recapitalised balance sheets translate into demonstrably stronger policyholder outcomes.

Ayo Susan is a journalist, covering business, society and emerging developments with an emphasis on credible and engaging storytelling.