The National Insurance Commission (NAICOM) has charged insurance companies in the country to convert their capital adequacy from the recently concluded recapitalisation exercise into stronger underwriting capacity, real time claims settlement and improved customer service.
The National Commissioner for Insurance, Olusegun Omosehin, who gave the charge to the risk-underwriting entities at a conference with the theme “From Capital to Capacity: Driving Growth, Innovation and Trust in Nigeria’s Insurance Sector” in Lagos, noted that the success of the recapitalisation exercise should not be measured by the capital injected into insurance companies but by the additional capacity created by the funds to grow the industry.
The insurance expert, who was represented at the forum by the Head of NAICOM’s Lagos Control Office, Julius Odidi, maintained that stronger balance sheets should enable insurers to take on larger risks, meet claims obligations, invest in technology and improve confidence in the industry.
According to him, “financial strength, while necessary, is not an end in itself. The true purpose of capital is to create capacity; the capacity to underwrite risks, the capacity to pay claims, the capacity to innovate, the capacity to inspire confidence, and ultimately, the capacity to support economic growth.”
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The National Commissioner, who said that the industry’s ability to deliver better services would be critical to determining whether the recapitalisation achieves its broader objectives, identified population growth, infrastructure development, the expansion of the digital economy, agricultural transformation and the growing middle class as areas that could create new opportunities for insurers.
Omosehin also explained that insurers would need to use technology, data analytics and artificial intelligence to develop products that are more affordable, accessible and responsive to changing consumer needs, especially today, when innovation is no longer optional had become the currency of relevance in the industry globally.
While linking insurance penetration to the industry’s ability to build public trust, the expert stressed that insurers must demonstrate their value by meeting their obligations to policyholders, just as claims payment should be one of the clearest measures of an insurer’s commitment to customers.
He further clarified: “The true test of any insurance company is not how many policies it sells. The true test is how effectively it responds when policyholders need support,” he said.
“The industry’s capacity will ultimately be determined by the quality of its people,” he said.
“The journey from capital to capacity is not one that NAICOM can undertake alone. It requires collaboration, partnership and leadership from every stakeholder”, Omosehin added.
