Nigeria’s insurance sector is gradually shifting into a more strategic phase, where discussions are no longer limited to regulatory compliance and market supervision, but are increasingly focused on resilience, climate risk management, and the long-term stability of the financial system.
This direction was reinforced during a recent high-level engagement between the National Insurance Commission (NAICOM) and the United Nations Development Programme (UNDP), where both institutions reviewed opportunities to strengthen insurance as a tool for national development. Central to the discussions was how the industry can better respond to climate-related risks while also widening access to insurance protection for more Nigerians.
The engagement took place during a courtesy visit by a UNDP delegation led by David Mueller,regional specialist who was received at NAICOM’s headquarters in Abuja by Olusegun Ayo Omosehin, the commissioner for Insurance.
The meeting provided a platform for both institutions to align on strategic priorities aimed at deepening collaboration. These include expanding insurance penetration, strengthening market stability, and scaling risk transfer mechanisms capable of addressing climate and disaster-related shocks across the country.
A major focus of the discussion was the Lagos Flood Risk Insurance Model, which UNDP expressed interest in scaling further as part of broader climate resilience efforts. This aligns with emerging sub-national interventions already taking shape in the country. Late last month, Lagos State activated a $7.5 million parametric flood insurance policy designed to provide rapid financial payouts in the aftermath of flood disasters, with about four million vulnerable residents expected to benefit from the initiative. The development is increasingly being viewed as a reference point for how structured insurance solutions can support disaster response at scale.
Speaking during the visit, David Mueller commended ongoing reforms in Nigeria’s insurance sector and reaffirmed UNDP’s commitment to supporting its continued development. He highlighted key areas of focus including strengthening actuarial capacity, expanding systemic capabilities within the industry, and supporting insurers in mobilising domestic capital towards sustainable investments.
He also noted that UNDP’s engagement would continue to build on earlier collaborations in the sector, particularly lessons from previous projects focused on risk financing, resilience building, and institutional strengthening.
In his response, Olusegun Ayo Omosehin, the commissioner for Insurance, expressed appreciation for UNDP’s sustained support and partnership over the years. He explained that NAICOM’s reform agenda is anchored on five strategic pillars designed to reposition the industry for greater efficiency, stronger governance, and improved penetration.
According to him, the Commission is prioritising transparency in its ongoing recapitalisation programme, encouraging innovation across the market, and creating a regulatory environment that supports increased insurance penetration. He stressed that these efforts are intended to strengthen both consumer confidence and the financial resilience of operators.
Omosehin also referenced the recently enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025, describing it as a significant milestone that provides a stronger legal foundation for the sector. The law, he noted, enhances consumer protection, improves regulatory oversight, promotes innovation and sustainability, and expands access to insurance services across different segments of the population.
A key component of the reform agenda is the ongoing recapitalisation exercise within the industry, which is expected to run through to 31 July 2026. The Commissioner explained that the process is aimed at improving the financial strength of insurance companies, ensuring they are better positioned to absorb shocks and meet emerging obligations in an increasingly complex risk environment. To support operators, NAICOM has also set up dedicated structures, including a Recapitalisation Committee, to provide guidance throughout the process.
Beyond financial reforms, Omosehin highlighted the Commission’s growing focus on Environmental, Social and Governance (ESG) principles. He disclosed that NAICOM is developing an internal ESG framework to guide sustainable insurance practices, building on earlier technical support and diagnostic work carried out in collaboration with development partners such as UNDP and FSD Africa.
The discussions also placed strong emphasis on human capital development within the industry. Both institutions agreed on the need to significantly expand actuarial capacity, which remains a critical gap in the Nigerian insurance ecosystem. Proposed interventions include coordinated capacity-building programmes and partnerships with technical service providers, alongside initiatives such as the GAIN programme aimed at strengthening industry expertise.
Another major point of discussion was the possibility of reviving a national catastrophic insurance scheme. The initiative, which would be developed jointly by NAICOM, UNDP, and relevant disaster management agencies including the National Emergency Management Agency (NEMA), is expected to provide a structured response mechanism for large-scale disasters, particularly those linked to climate events.
Overall, the engagement reflected a shared understanding that Nigeria’s insurance industry is entering a more strategic phase, where collaboration, innovation, and climate resilience are becoming central to its growth trajectory.
