The National Insurance Commission (NAICOM) has expressed commitment to striking a balance between robust supervision and sustainable growth by leveraging advanced risk based supervision methodologies.
The Commissioner for Insurance, Mr Olusegun Ayo Omosehin made the policy statement while doing an overview of the commission’s major achievements under his leadership; highlighting successes so far made by the commission to reposition the insurance industry, while addressing insurance and pension journalists at a seminar held in Abeokuta, Ogun state.
According to Omosehin, ‘’we are dedicated to striking a balance between robust supervision and sustainable insurance industry growth. By leveraging advanced risk-based supervision methodologies. we have also optimized our regulatory framework to: Identify and address high risk areas; focusing our inspection and monitoring efforts on sectors and institutions that pose the greatest risks to market stability.’’
Speaking on promoting risk informed decision making He explained that this is to ensuring that boards and management of the industry align their capital, controls, and strategy with their risk profile, fostering a culture of risk awareness and risk management. According to him, ‘‘Our goal is to deliver a resilient, fair, and efficient insurance market that balances prudential oversight with growth and innovation, protecting policyholders’ interests while supporting the industry’s development.
On the issue of cleaner market conduct and faster redress, the commissioner stated that the Commission has significantly elevated the standards for transparency and accountability in the insurance industry by tightening expectations on: (1) Disclosure requirements: which is ensuring policyholders receive clear and concise information about their insurance products. (2) Sales practices: Promoting fair and transparent sales practices that prioritize policyholders’ interests. (3) Pricing fairness: Ensuring insurance products are priced fairly and without bias. (4) Claims handling: Streamlining claims processing and ensuring prompt settlement of genuine claims.
To further enhance policyholder protection, the commission has shortened response windows for complaints; ensuring timely resolution of policyholder grievances, as well as, clarified escalation paths; which means providing clear and efficient channels for policyholders to escalate concerns. ‘‘Our stance on claims settlement is unequivocal: we maintain zero tolerance for non-settlement of genuine claims. As a result, insurance companies are expected to adhere to a ‘sell-what-you-can-service’ principle, ensuring they only offer products they can adequately support and deliver on.’’ The Commissioner stated.
Speaking on data that has helped the commission regulate better, Omosehin stated that it has significantly enhanced the quality and timeliness of regulatory returns, enabling more effective oversight and informed decision-making; adding that this improvement allows the commission to: (1) Identify emerging trends and issues early: Leveraging advanced data analytics to detect potential risks and take proactive measures. (2) Conduct comparative analyses: Which means facilitating like-for-like comparisons across companies to assess performance and compliance. (3) Make data driven decisions: Informing regulatory actions and policy development with high-quality, timely data.
Furthermore, Omosehin explained that this enhanced data framework enables commission to provide greater transparency through public-facing snapshots, allowing stakeholders to track progress and industry developments.
On inclusion that meets people where they live and work, the commissioner stated: ‘‘we have fostered the growth of microinsurance, Takaful, InsurTech and web aggregator hence, promoting the development of simple, accessible, and affordable insurance products. By embracing alternative distribution channels, we’re expanding insurance reach to underserved markets. To increase penetration, insurance solutions must be present in high-impact sectors such as: Transport, Agriculture, Micro, Small, and Medium Enterprises (MSMEs), Digital marketplaces. By ensuring insurance products reach people where they are, we can drive greater financial inclusion and protection.’’
A clearer path for innovation: To foster a culture of innovation and stay abreast of emerging trends, the commission has established: (1) Innovation Hub Directorate: A dedicated team to nurture and support innovative ideas, products, and services in the insurance industry. (2) Regulatory Sandbox Framework: A structured environment for testing and refining innovative insurance concepts, including:
Embedded Insurance: Integrating insurance products seamlessly into non-traditional platforms and ecosystems; Usage-Based Pricing: Tailoring premiums to individual usage patterns, promoting fairness and personalization and Parametric Insurance: Providing pay-outs based on predefined parameters, enabling efficient and transparent claims settlement.
This framework achieves a delicate balance between fostering innovation and maintaining robust regulatory oversight, ensuring that policyholder protection and market integrity are preserved while encouraging experimentation and creativity.
Call for more collaboration across the system: This is meant to address complex challenges and drive industry progress, fostering closer collaboration with sister regulators and public agencies on key initiatives, including: Compulsory Insurance Implementation: Ensuring effective enforcement and compliance with mandatory insurance requirements.
Financial Inclusion: This is meant to promote access to insurance and financial services for underserved populations.
Cyber-Resilience: Enhancing the industry’s ability to withstand and respond to cyber threats.
Fraud Prevention: Sharing intelligence and best practices to detect and prevent insurance fraud.
Data Sharing: Facilitating the secure exchange of data to inform regulatory decisions and industry development.
‘‘By working together across institutional boundaries, we can develop more effective solutions to complex problems and drive a more resilient and inclusive insurance market,’’ the commissioner concluded.
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