NAICOM calls for stronger insurance sector as climate, cyber

The National Insurance Commission (NAICOM) has called for a stronger, more technologically enabled and financially resilient insurance industry, warning that climate change, cyber threats, geopolitical tensions, inflation and exchange-rate instability are rapidly transforming the risk landscape facing Nigerian businesses and households.

Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Olusegun Ayo Omosehin, made the call in Abeokuta, Ogun State, at the 2026 Insurance Professionals’ Forum organised by the Chartered Insurance Institute of Nigeria.

Speaking on the theme, “The Economics of Risk: Sustaining a Resilient Insurance Industry,” Omosehin said insurance should be viewed not merely as a financial service but as a critical component of economic infrastructure capable of converting uncertainty into confidence and supporting investment, entrepreneurship and long-term development.

He said the importance of insurance extended across major sectors of the economy, noting that agriculture, infrastructure, trade and energy all depended on effective risk-transfer mechanisms to attract and protect capital.

According to him, businesses become more reluctant to invest when they cannot adequately manage uncertainty, while effective insurance allows companies and individuals to undertake productive activities without carrying the full cost of potential losses.

“Insurance is often described as the invisible infrastructure of economic development because its contribution, though frequently unnoticed, is indispensable,” he said.

Omosehin said the nature of risk was changing rapidly, with traditional threats such as fire, accidents and property damage now being compounded by climate-related disasters, cyberattacks, supply-chain disruptions and geopolitical shocks.

He said floods, droughts, desertification and storms were becoming more unpredictable and capable of generating larger losses, while cyber threats were increasingly capable of disrupting businesses and critical infrastructure.

The NAICOM chief said insurers could no longer rely exclusively on historical claims data to predict future losses.

He urged the industry to increasingly deploy predictive analytics, enterprise risk management, scenario modelling, climate intelligence and advanced technology in underwriting and claims management.

Nigeria’s insurance industry, he said, was also undergoing significant regulatory transformation following the enactment of the Nigeria Insurance Industry Reform Act (NIIRA) 2025, which has raised expectations around institutional strength, regulatory oversight and policyholder protection.

Omosehin said the reform was designed to move the industry towards financially stronger, better-governed and more consumer-focused insurance institutions.

He said the ongoing recapitalisation of insurance companies should not be measured simply by increased balance sheets, but by the ability of insurers to retain larger risks, settle claims efficiently, invest in technology and participate in major national and regional projects.

“A resilient insurer is one that remains solvent during economic stress, honours its obligations during crises, and retains the confidence of policyholders under all circumstances,” he said.

The Commissioner also placed trust and corporate governance at the centre of insurance-sector development, describing insurance as a promise between policyholders and insurers.

He said prompt claims settlement, transparency, accountability, ethical leadership and sound market conduct were essential to rebuilding public confidence.

The establishment of the Insurance Policyholders’ Protection Fund under NIIRA 2025, he added, provides an additional safety net for policyholders in circumstances involving insurer distress.

Omosehin also highlighted the significant opportunity presented by Nigeria’s low insurance penetration.

Millions of Nigerians, he said, remained uninsured or underinsured, leaving households and businesses vulnerable to financial shocks.

He urged insurers to expand affordable and accessible products such as microinsurance, agricultural insurance and technology-enabled insurance solutions, particularly for underserved populations.

According to him, closing the protection gap could strengthen household resilience, support small businesses, improve agricultural productivity and contribute to poverty reduction.

The Commissioner further called for greater investment in human capital, saying emerging risks require insurance professionals with expertise spanning actuarial science, finance, economics, data analytics, cybersecurity, climate risk and enterprise risk management.

He urged the Chartered Insurance Institute of Nigeria to deepen professional education and continuous training to ensure practitioners remain equipped for the changing risk environment.

Omosehin said collaboration among insurers, reinsurers, brokers, regulators, technology companies, policymakers and consumers would be critical to strengthening the industry.

“The challenges we face are too complex for isolated solutions,” he said, stressing the need for coordinated responses to climate risk, cyber threats, catastrophe financing, infrastructure protection and financial inclusion.

He said the ultimate objective should be to position insurance as a catalyst for economic transformation rather than merely a mechanism for compensating losses.

The expanding risk environment, he noted, makes a resilient insurance market increasingly important to Nigeria’s economic ambitions because stronger risk protection can support investment, protect productive assets, improve access to finance and cushion businesses and households against major economic shocks.