NAICOM’s ISSP Targets Deeper Insurance Penetration Through Trust, Inclusion, Market Reform

By Ayo Susan

The National Insurance Commission (NAICOM), led by Commissioner for Insurance and Chief Executive Officer, Mr. Olusegun Ayo Omosehin, has launched the 36-60-month Insurance Sector Strengthening Programme (ISSP), targeting an increase in insurance penetration from 0.5 percent of Gross Domestic Product to 1.5 percent by 2028 and ultimately 10 percent by 2031. Launched with industry stakeholders, the programme will operate across all 36 states and the Federal Capital Territory through six pillars covering awareness, policy, capacity, gender, youth, and Micro, Small and Medium Enterprises (MSMEs) development, targeting five million people, two million women, 1.5 million youths and 250,000 MSMEs, while training 6,000 professionals.

DECISION HIGHLIGHT

The ISSP’s significance lies in its recognition that Nigeria’s insurance deficit is fundamentally a trust, access and market-development problem, not merely a regulatory one.

DECISION MEMO

The 10 percent penetration ambition is deliberately aggressive, but the more immediate analytical test is the first-stage target of tripling penetration to 1.5 percent by 2028. That creates a measurable pathway between the industry’s current position and its longer-term ambition.

The starting point explains the urgency. Only about five percent of Nigerians are estimated to have insurance coverage, while 78 percent lack basic insurance knowledge. Women account for 32 percent of policyholders, youths aged 18-35 less than 20 percent, and MSME coverage only eight percent.

Omosehin’s approach is therefore centred on changing both market behaviour and industry conduct. He has challenged insurers to strengthen underwriting, governance and claims administration, alongside capitalisation, transparency and prompt settlement of genuine claims.

His regulatory philosophy is explicit: “Regulation must serve as both a shield for policyholders and a compass for responsible market development.”

That formulation is important because greater penetration without stronger market discipline could simply expand the number of dissatisfied policyholders. The programme consequently links growth with consumer protection, professionalism and solvency.

Digitalisation provides the transmission mechanism. Digital-first products, insurtech solutions and data-driven distribution could reduce some of the traditional access barriers, particularly for younger consumers and underserved businesses.

Leadway Assurance’s Head of Commercial Division, Olawale Alao, sees the programme as an opportunity to alter the market’s relationship with consumers. “Over the next five years, we believe this initiative can deepen awareness, particularly among young Nigerians, build stronger trust in the sector and encourage more people to see insurance as an essential tool for protection and financial resilience.”

The emphasis on MSMEs is also economically consequential. With only eight percent coverage, the segment represents a substantial underpenetrated market while also offering an avenue for improving business resilience against financial shocks.

The ISSP’s phased structure strengthens its implementation logic. The first 12 months focus on governance, baseline assessments, awareness, training and product pilots; months 13-35 scale interventions; the final phase institutionalises successful programmes and sustainable financing mechanisms.

The monitoring framework adds another layer of accountability, with monthly penetration tracking, quarterly demographic reviews, biannual professional assessments and annual customer-satisfaction evaluations.

Omosehin nevertheless recognises that NAICOM cannot deliver the transformation alone. “The vision before us is ambitious, but it is achievable,” he said, placing responsibility across insurers, intermediaries, professional bodies, technology providers, development partners, educational institutions and the media.

DATA BOX

• 0.5 percent: Current insurance penetration as a share of GDP.
• 1.5 percent: Target for 2028.
• 10 percent: Target for 2031.
• 36-60 months: ISSP implementation horizon.
• 5 million: General population targeted.
• 2 million: Women targeted.
• 1.5 million: Youths targeted.
• 250,000: MSMEs targeted.
• 6,000: Insurance professionals targeted for training.
• 78 percent: Population estimated to lack basic insurance knowledge.
• 8 percent: Estimated MSME insurance coverage.
• Six: ISSP strategic pillars.

WHO WINS / WHO LOSES

WHO WINS: Underserved households, women, youths and MSMEs stand to gain from broader access, while insurers gain access to substantially larger customer segments.

WHO LOSES: Operators dependent on weak underwriting, poor claims administration and low consumer trust face stronger competitive and regulatory pressure.

POLICY SIGNALS

The ISSP signals a shift from viewing insurance penetration primarily as a numerical target towards building the institutional conditions required for sustainable uptake.

Consumer protection, professional capacity, digital distribution and market discipline are being treated as prerequisites for expansion.

INVESTOR SIGNAL

A larger insured population creates deeper opportunities for insurers, intermediaries, technology providers and financial-service businesses. The 250,000-MSME target is particularly relevant for commercial insurance and enterprise-risk products.

For investors, however, market expansion will be meaningful only if higher policy volumes translate into sustainable premiums, sound underwriting and efficient claims settlement.

RISK RADAR

The principal risk is execution credibility. Moving from 0.5 percent penetration to 10 percent requires a structural change in consumer behaviour and industry performance, not simply greater awareness.

The other critical risk is trust. If claims remain slow, disputed or inadequately settled, awareness campaigns alone will have limited capacity to convert potential customers into sustained policyholders.