Joy Agwunobi
The National Insurance Commission (NAICOM) and Nigeria’s Ministry of Finance have urged West African governments and insurers to leverage insurance as a frontline defence against the worsening impacts of climate change, stressing that the industry must evolve beyond its traditional role to become a strategic pillar of national economic resilience.
Speaking at the 2025 West African Insurance Companies Association (WAICA) Education Conference in Lagos, Olusegun Omosehin, commissioner for insurance and chief executive officer of NAICOM, said climate change has emerged as a macroeconomic threat that is reshaping fiscal policy, national budgets, and the stability of financial systems across the sub-region.
He called on insurers, reinsurers, and regulators under the WAICA umbrella to embrace innovation, data-driven decision-making, and cross-border partnerships to develop insurance solutions tailored to Africa’s climate realities.
“This is a call to action.We must innovate boldly, developing parametric and microinsurance products that reflect the peculiar risks of our region. Traditional budgetary responses are no longer sufficient to handle the scale of climate-related disruptions,” Omosehin stated.
He explained that while Nigeria, like many African nations, continues to struggle with a widening climate finance gap, integrating insurance into national economic planning offers one of the most effective means of managing these risks and cushioning vulnerable populations from economic shocks.
“We must strengthen financial instruments that allow us to anticipate shocks rather than merely react to them,” he said, adding “When properly embedded into national planning, insurance becomes a powerful tool for climate risk management and economic resilience.”
Citing recent data on climate-induced disasters, Omosehin emphasised the growing toll of extreme weather events across West Africa. In 2024 alone, flooding affected more than 7.5 million people across 16 countries in the region, with Nigeria accounting for 1.3 million displaced persons. By 2025, he noted, over 33,000 Nigerians had been displaced, 3,800 homes destroyed, and over 5,000 hectares of farmland submerged; threatening both food security and economic stability.
“These are not just statistics,” he said. “They represent human stories of disruption, loss, and delayed development. Yet, within this crisis lies an opportunity to redefine the role of insurance as a force for resilience and sustainable growth.”
Omosehin urged WAICA member states to unite behind a five-point action plan that would reposition the insurance industry as a frontline instrument for climate resilience. He called on the region’s insurers to innovate boldly through product diversification and technology adoption, invest in data and climate modelling to deepen understanding of emerging risks, and collaborate across borders to pool resources and strengthen financial capacity.
He further emphasised the need to expand inclusion by ensuring that insurance reaches informal workers, farmers, and small business owners who remain most exposed to climate shocks, while also prioritising capacity building across the regional insurance ecosystem to sustain long-term growth and resilience.
Highlighting Nigeria’s ongoing policy reforms, the NAICOM CEO pointed to the Nigeria Insurance Industry Reform Act (NIIRA) 2025 as a key step towards modernising the sector. The Act, he explained, introduces stronger capital requirements, expands compulsory insurance classes to include agricultural and environmental risks, and promotes public-private partnerships (PPPs) aimed at improving infrastructure resilience.
“These reforms are not merely technical,” Omosehin said, adding “They are foundational to our national preparedness and long-term sustainability. The Act creates an enabling framework that positions insurance as both a financial stabiliser and a driver of development.”
He added that addressing climate-related risks will require coordinated action across the West African sub-region, blending regulation, innovation, and partnerships among governments, private sector players, and development institutions.
“Climate change does not respect borders,” he stressed. “Just as rain falls on many roofs, so too must our response be collective.”
On her part, Doris Uzoka-Anite, minister of State for Finance, emphasised that insurance must be recognised as a central pillar of economic planning and fiscal stability across West Africa. Represented by Ali Mohammed, director of the Home Finance Department at the Ministry, the minister noted that climate risk has evolved from a purely environmental issue into a financial and developmental challenge that directly influences fiscal policy and the stability of financial systems.
“Climate risk is now a financial risk,” she said. “No nation can confront this threat alone. The same storms that affect Nigeria also impact Ghana, Sierra Leone, Liberia, and The Gambia. Our solutions, too, must be collective.”
Uzoka-Anite explained that West Africa loses billions of dollars annually to floods, droughts, and coastal erosion — disasters that destroy livelihoods, strain public finances, and impose heavy fiscal burdens on governments.
She called for a stronger collaborative framework under WAICA built around three strategic pillars: developing regional risk-pooling and reinsurance platforms;sharing data and expertise on climate modelling and disaster forecasting; and building professional capacity for sustainable, innovative insurance products that can serve as financial buffers for agriculture, trade, and small enterprises.
“Through WAICA, we can transform insurance from a business venture into a development enabler,” she said, while also noting that this transformation begins with collaboration — across borders, across industries, and across communities.
Uzoka-Anite also underscored the importance of expanding insurance access to the most vulnerable populations. She stressed that insurance will achieve its true developmental impact only when it reaches the people who need it most — farmers, artisans, traders, and micro-entrepreneurs forming the economic backbone of West African societies.
“Insurance must not remain an elite product,” she said. “Its real value lies in protecting livelihoods and enabling recovery for those at the base of the economic pyramid.”
She further noted that Nigeria is advancing new frameworks that combine sovereign risk insurance, regional disaster-risk pools, and public-private climate finance mechanisms to improve fiscal preparedness and response. These tools, she said, will ensure rapid recovery from climate shocks while safeguarding economic stability.
“Each disaster brings not only human tragedy but also heavy fiscal burdens. Insurance therefore becomes an indispensable mechanism to absorb and share these shocks; a financial shield that governments alone cannot provide,” the minister said.
Both NAICOM and the Ministry of Finance agreed that the urgency of climate adaptation demands a unified West African response; one that blends regulatory reforms, private sector innovation, and public investment in resilience infrastructure.
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