The insurance industry may be bracing up for recapitalisation even as the National Insurance Commission (NAICOM) unveiled a new plan to strengthen regulatory capacity to drive industry efficiency.

This comes years after the last recapitalisation was stalled by litigation. If the planned recapitalisation happens in the next two years, the industry will need to compete with banks for scarce funds.

As part of his plan to strengthen the financial stability of the operators, the regulator has hinted that it could impose new capital requirements on the operators going forward.

The Commissioner for Insurance, Olusegun Omosehin, said this at an interactive session with journalists in Lagos, saying the commission has become wary of the poor public perception of the industry.

The commission has rolled out strategic plans centered on five key priorities that would guide the agency’s efforts to regulate, supervise and develop the insurance market in the country.

Omosehin, in a presentation at the meeting, reflected on the transition from a profit-driven private sector career to the new role focused on public service about the significant mindset shift required to prioritise the public good and consumer protection over profitability. He said his previous roles in the private sector were guided by one consideration—profitability and sustainability.

“But with my new appointment as the leader of NAICOM, my priorities have to change drastically. The first step is unlearning those profitability motives and relearning the importance of serving the public and defending the interests of the insurance consumers in the country,” he said.

Omosehin noted that in the past three months of his resumption, he has been deeply engaged in extensive consultation with key stakeholders, including the Nigerian Reinsurance Corporation (NRC), the Nigerian Council of Registered Insurance Brokers (NCRIB), lawmakers overseeing the insurance sector and consumer advocacy groups.

“These discussions have culminated in a strategic blueprint that will shape the future of the insurance sector in Nigeria,” he said. The commissioner acknowledged the declining trust in the insurance industry, driven by the failure of underwriting firms to meet their obligations. He stressed that safeguarding policyholders’ interests is now NAICOM’s primary focus.

“By protecting policyholders, we believe we can rebuild the public’s trust in our industry,” he stated. He also pointed out that there is a need for the commission to enhance internal capabilities and the legal framework to enable functional regulatory action, saying: “We want NAICOM to have the same kind of powers that other financial regulators have, such as the Central Bank of Nigeria (CBN)”.

The commissioner stressed the importance of financial stability among insurance operators. He said NAICOM might consider raising minimum capital requirements to strengthen the sector’s financial soundness. He also talked about fostering innovation, which he identified as a critical driver of growth. To this end, NAICOM plans to establish a new directorate focused on encouraging innovative ideas within the industry.

“We believe that innovation is key to driving growth and development in the insurance sector,” Omosehin noted.
He also spoke about improving accessibility and penetration, which includes enforcing compulsory insurance policies and ensuring that a broader segment of the population benefits from insurance coverage.

Omosehin also underscored the role of the media in shaping public perception of the insurance industry. He expressed optimism about the future of NAICOM and the insurance sector, believing that the foundation laid in recent months would lead to significant improvements in public trust and industry stability.