The National Insurance Commission (NAICOM) has revealed plans to roll out a draft of Insurtech Operation Guidelines, which will be released soon, to address market changes.
The commission also called on industry operators to embrace innovation to accelerate fast market changes, alongside changes in consumers’ preferences, tastes and lifestyles.
This was the submission of the Commissioner for Insurance, Olusegun Omosehin, at the Insurance Meet Tech (IMT) 2024 conference in Lagos.
The commissioner, who was represented by the Head of the Lagos Control Office of the commission, Dr Julius Odidi, said there are needs for underwriting firms in the sector to develop products that meet the demands of consumers in the market.”
According to him, organisations are leveraging technology to drive growth, improve efficiency and stay competitive in an increasingly complex landscape.
Odidi noted that the increasing momentum of insurtech development poses both opportunities and challenges for established industry players.
To remain competitive, he said, it is crucial that the commission proactively incorporate innovative insurtech solutions that would change conventional business models.
The commissioner added that this would safeguard the industry’s continued relevance in addressing customer needs and market position.
“The commission had since understood this reality and issued the regulatory sandbox guideline to accommodate the testing and refinement of innovative products.
“Consequently, we established a directorate for innovation and regulation, recognising that change requires new approaches.
According to him, the current realities of economic instability, climate change, rapid technological advancement, changing behaviour of consumers, soaring inflation and FX instability on global financial markets have disrupted the ways financial services are carried out.
“Hence, we must imbibe technology for us to have a one-stop shop for insurance products and services,” he said.
He expressed that commitment extends to ensuring prompt settlement of legitimate claims, promoting market growth through innovation, and driving commercial value within the industry.
The commissioner noted that in achieving the objective of revitalising the insurance industry, fundamental issues plaguing the sector must be addressed.
Odidi outlined some of these plagues as low insurance penetration, lack of public trust, market fragmentation, regulatory reforms, digital transformation and adaptation.
“The current NAICOM management recognises the urgent need to strategically reposition the insurance industry and place a high priority on certain areas that will potentially stimulate the transformation agenda of the insurance sector.
“As a commission, we have set out five priority areas for immediate implementation which include safeguarding policyholders and improving confidence in the industry, strengthening our supervisory capabilities and organisational effectiveness.
“Also, improving safety and soundness of the Nigerian insurance industry, fostering innovation and sustainability of the Nigerian insurance industry, and enhancing overall insurance accessibility and penetration in Nigeria,” he said.
