Nigeria’s insurance industry is positioning for a new phase of growth as the regulator pushes stronger claims settlement, mandatory insurance bonds for government contracts, and wider market expansion across key sectors.

At a meeting of the Nigerian Insurers Committee, the National Insurance Commission (NAICOM) urged operators to sustain prompt claims payments while preparing to tap emerging opportunities in government contract bonds, health protection insurance, and other underdeveloped segments of the market.

According to Ebelechukwu Nwachukwu, chairman, Communications & Stakeholders Engagement Sub-Committee of the Nigerian Insurers Committee, the regulator also called on insurers to accelerate recapitalisation efforts and strengthen industry reforms aimed at deepening insurance penetration and rebuilding consumer confidence.

“The Commissioner commended the industry for the settlement of large claims recorded last year and encouraged practitioners and CEOs to continue prioritising claims payment, whether big or small,” Nwachukwu said.

“He emphasised that prompt claims settlement is critical to sustaining the reputation of the insurance industry and building trust among policyholders.”

Nwachukwu disclosed that the Olusegun Omosehin, the commissioner for Insurance also highlighted several growth opportunities for insurers, particularly in government contracts, health insurance, bancassurance, and specialised sectors.

One of the major opportunities stems from a collaboration between NAICOM and the Bureau of Public Procurement (BPP), which will make insurance bonds mandatory for government contracts.

Under the arrangement, contractors bidding for government projects will be required to provide insurance-backed bonds such as bid bonds and advance payment guarantees.

“The Commissioner highlighted his meeting with the Bureau of Public Procurement where an agreement was reached that insurance bonds would become a key requirement for government contracts,” Nwachukwu explained.

“This means that contractors bidding for government tenders will be required to obtain insurance bonds, creating a significant opportunity for insurers to generate additional premiums while supporting government economic activities.”

NAICOM will establish eligibility criteria for insurers that can issue such bonds, with solvency expected to be one of the key requirements.

The Commissioner also urged insurers to strengthen their internal processes to ensure seamless bond issuance and efficient claims payment where necessary.

Another major opportunity identified by the regulator lies in the protection segment of health insurance, which remains largely underdeveloped in Nigeria.

While the health sector is currently dominated by Health Maintenance Organisations (HMOs), the Commissioner encouraged insurers to develop protection-based health insurance products and partnerships.

“He noted that the protection side of health insurance is still significantly underdeveloped and presents a strong opportunity for insurers to deepen insurance penetration in the country,” Nwachukwu said.

The regulator has already circulated draft guidelines on the Policyholders’ Protection Fund for International Private Medical Insurance (IPMI), which insurers are reviewing.

The meeting also reviewed the progress of the industry’s recapitalisation exercise.

According to NAICOM, about 20 insurance companies have already written to the commission requesting verification of their capital positions, while verification processes have commenced for 16 firms.

However, the regulator expressed concern about the relatively slow pace of visible activity within the sector.

“The Commissioner noted that although some progress has been recorded, the industry needs to demonstrate greater urgency as the recapitalisation deadline approaches,” Nwachukwu said.

“He encouraged operators to intensify their efforts given that the timeline is moving quickly.”

The meeting also reminded operators of the upcoming Know-Your-Customer (KYC) compliance deadline of April 30, 2026, which requires insurers to ensure proper customer identification and documentation for policyholders. Industry stakeholders were urged to ensure full compliance ahead of the deadline.

Beyond regulatory updates, the meeting also reviewed progress on the industry’s reform programme under the Nigerian Insurance Reform Agenda (NIRA).

The Nigerian Insurers Association presented updates from the NIRA 2025 Implementation Committee, which has established three working groups focusing on compulsory insurance, digitalisation, and financial inclusion.

These groups are working on strategies to improve compliance with compulsory insurance policies, accelerate digital transformation across the sector, and expand insurance access to underserved populations.

Among the proposals discussed were the creation of an industry-wide data centre, expanded use of technology in regulatory compliance, and reforms aimed at promoting inclusive insurance products such as Takaful.

“The working groups emphasised that distribution remains a major bottleneck for insurance growth, consumer trust is still fragile, and technology is no longer optional for the industry,” Nwachukwu noted.

In addition, the Customer Service and Market Expansion Subcommittee recommended that insurers simplify policy documents to make insurance contracts easier for consumers to understand.

The committee noted that many policyholders only encounter complex policy clauses during claims processing, which often leads to misunderstandings.

Simplifying policy wording, according to the committee, will help improve transparency and rebuild consumer confidence in insurance products.

The meeting also reviewed developments under the African Continental Free Trade Area (AfCFTA), which is expected to open new cross-border opportunities for insurers.

According to Nwachukwu, the Nigerian insurance industry has already received partnership proposals from countries such as Kenya, Mauritius, South Africa and the United Arab Emirates.

“The industry is reviewing bilateral agreements signed by the Federal Government to assess their implications for insurance operations and ensure readiness for increased cross-border activities,” he said.

He added that the discussions were aimed at ensuring the industry is fully prepared to leverage emerging opportunities within Africa’s expanding trade and financial ecosystem.