Nigeria’s insurance industry is under mounting pressure to reform its operations, deepen trust, and unlock new revenue streams as the National Insurance Commission (NAICOM) implements sweeping measures. These reforms target claims settlement, capital strength, and market expansion.

At a recent meeting of the Nigerian Insurers Committee, the regulator emphasized the need for a more responsive and growth-oriented industry, moving away from slow claims, weak capitalization, and limited market reach.

Central to NAICOM’s directive is the consistent and prompt payment of claims, a long-standing concern that has undermined public confidence. While improvements in large claims settlements have been acknowledged, consistency across all claims remains critical.

Claims payment is considered the strongest indicator of credibility in the industry and is a non-negotiable obligation. NAICOM is also opening new business frontiers through a strategic partnership with the Bureau of Public Procurement (BPP). This will introduce compulsory insurance bonds for government contracts.

Contractors seeking public sector jobs will be required to obtain insurance-backed guarantees, such as bid bonds and advance payment bonds. This positions insurers at the center of public procurement financing. Operators have been directed to upgrade their internal systems to ensure seamless bond issuance and efficient claims processing, especially when guarantees are triggered.

Furthermore, NAICOM is encouraging insurers to expand into underdeveloped segments, particularly the protection side of health insurance. While Health Maintenance Organizations currently dominate healthcare delivery, NAICOM believes insurers can play a more significant role in risk protection and long-term coverage solutions.

The protection component of health insurance remains largely untapped and presents a significant opportunity for market expansion. To support this, the regulator has issued draft guidelines on the Policyholders’ Protection Fund for International Private Medical Insurance (IPMI), signaling a move towards stronger consumer safeguards in the health insurance space.

Despite emerging opportunities, NAICOM expressed concern over the slow pace of recapitalization across the industry. About 20 firms have initiated capital verification discussions, but only 16 have reached active review stages. Operators must accelerate their efforts as timelines tighten, as delays could undermine the broader reform agenda.

Insurers were reminded of the April 30, 2026 deadline for full compliance with Know-Your-Customer (KYC) requirements. Firms are urged to strengthen customer data processes and documentation.

Broader reforms under the Nigerian Insurance Reform Agenda (NIRA) are gaining traction, with industry groups focusing on compulsory insurance enforcement, digital transformation, and financial inclusion. The industry is also preparing to tap opportunities under the African Continental Free Trade Area (AfCFTA), which is opening new cross-border insurance markets.

Nigerian insurers have already received partnership interests from countries including Kenya, Mauritius, South Africa, and the United Arab Emirates, as the sector positions for regional expansion.

Separately, the African Insurance Organisation (AIO) has commenced its Agriculture and Climate Insurance Certification Project in collaboration with the IFC – International Finance Corporation and the Global Inclusive Insurance Facility (GIIF) of the World Bank Group. The AIO is implementing capacity building for agriculture and climate insurance seminars.

The first phase of the two-track training program utilizes GIIF’s 2024 Modules on Technical Design and Premium Calculations for Crop Climate Insurance. This phase focuses on Excel-based methods for calculating premiums and assessing risks using historical rainfall data and insurance parameters.

Phase 1 for English-speaking African countries is currently underway in Kigali, Rwanda, with 58 participants from Nigeria, Tanzania, Rwanda, Zimbabwe, Ghana, Ethiopia, Zambia, Uganda, Liberia, Kenya, South Africa, and Namibia, under the auspices of the Rwanda Insurers Association – ASSAR.