By Kehinde Ibrahim , Lagos
THE post-recapitalisation phase of Nigeria’s insurance and pension industries must be defined by stronger institutions, improved service delivery and better financial outcomes for policyholders and pension contributors, regulators and industry stakeholders have said.
They made the call in Lagos at the 11th Annual Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE), which focused on the theme, “Post-Recapitalisation Market Dynamics in Insurance and Pension Sectors.”
The stakeholders stressed that the success of the recapitalisation exercises should not be measured solely by the amount of capital raised or the size of operators’ balance sheets, but by the ability of the strengthened institutions to deliver greater value, protect customers and support Nigeria’s economic development.
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr Olusegun Omosehin, said the completion of the insurance recapitalisation exercise marked the beginning of a new phase for the industry.
He said insurers must move beyond meeting minimum capital requirements and focus on preserving the quality of their capital, strengthening balance sheets, improving risk management and enhancing claims settlement.
According to him, the increased capital base would give operators greater capacity to expand their businesses and underwrite larger risks, but warned that expansion without adequate risk controls could undermine the gains achieved through recapitalisation.
Omosehin urged insurers to deploy their capital prudently and ensure that their assets were properly aligned with their liabilities.
He said operators must maintain adequate, liquid and diversified investments capable of meeting their obligations to policyholders when they fall due.
The commissioner also called for disciplined investment policies, stronger corporate governance and robust risk-management frameworks to protect the enhanced capital base of insurance companies.
He said risk-based supervision would remain a major regulatory priority as the industry moved towards a risk-based capital regime.
To achieve this, he urged operators to strengthen enterprise risk management, actuarial capabilities and stress-testing frameworks to enable them adequately identify, assess and manage emerging risks.
Omosehin said the ultimate measure of the success of recapitalisation would be the impact on policyholders, particularly the speed and efficiency with which legitimate claims were settled.
He noted that prompt claims payment was critical to rebuilding public confidence in insurance and encouraging more Nigerians and businesses to embrace risk protection.
The NAICOM chief executive further urged insurance companies to strengthen board oversight, accountability, ethical leadership and regulatory compliance, stressing that stronger financial capacity must be supported by effective governance structures.
He identified technology, digital distribution and human capital development as critical drivers of growth in the post-recapitalisation era.
According to him, insurers must invest in digital platforms, professional training and specialised expertise to effectively manage larger balance sheets and increasingly complex risks.
He specifically identified actuarial science, investment management, technology and risk management as areas requiring deeper professional capacity.
Omosehin said the objective should be to build an insurance industry that is more resilient, transparent, innovative and customer-focused, while increasing its contribution to Nigeria’s economic development.
Also speaking, the Director-General of the National Pension Commission (PenCom), Mrs Omolola Oloworaran, issued a strong warning to pension operators that had yet to comply with the recapitalisation requirements, directing them to meet the prescribed capital thresholds without further delay.
“I’d like to make a warning to the industry. All those who have not met the recapitalisation in the pension industry, there’s no going back. Go and meet your capital requirements with urgency,” she said.
Oloworaran said the recapitalisation was necessary to strengthen regulated institutions and improve their ability to withstand economic and financial shocks.
She explained that the reforms were particularly important because pension and insurance institutions manage funds that are directly linked to the livelihoods and long-term financial security of millions of Nigerians.
According to her, the broader objective of strengthening the pension industry was to ensure that contributors could retire with greater financial security, dignity and peace of mind.
The PenCom director-general, however, stressed that recapitalisation should not be regarded as an end in itself.
She said stronger and more resilient institutions would only be meaningful if the reforms translated into improved services, better investment outcomes and enhanced retirement benefits for contributors.
“Beyond recapitalisation, yes, industries are bigger, more resilient and all of that. But at the end of the day, the person, the human we exist to serve, is not feeling the impact. Then what is the importance of all the reforms we put out,” she said.
Oloworaran said PenCom was increasingly focusing on how pension assets could be deliberately and efficiently deployed to generate better returns for contributors, rather than concentrating solely on the growth of assets under management.
She urged insurance and pension editors to play a more critical role in scrutinising the policies and activities of regulators and operators, particularly by asking whether reforms were producing measurable benefits for Nigerians.
The PenCom boss commended NAIPE for creating a platform for engagement among regulators, operators and the media, adding that the commission would continue to deploy available regulatory tools to strengthen the pension system and improve public confidence.
The Group Managing Director and Chief Executive Officer of Custodian Investment Plc, Mr Wale Oshin, also called for closer collaboration between the insurance and pension industries to strengthen retirement security and protect the interests of retirees.
Oshin said cooperation between the two sectors should extend beyond regulators to include operators and other stakeholders, particularly in addressing the challenges confronting retirees and annuity holders.
He said recapitalisation provided an opportunity for operators to build stronger institutions, improve resilience, invest in technology and enhance their capacity to meet long-term obligations.
However, he cautioned that raising additional capital alone would not guarantee the success of the reforms.
According to him, the real value of recapitalisation would ultimately be determined by the quality of services provided and the benefits delivered to customers.
Oshin therefore urged insurance companies and pension operators to focus on building sustainable businesses rather than simply meeting regulatory requirements.
He also called for greater attention to annuity products and retirement income, warning that inadequate retirement benefits could weaken public confidence in the pension system.
The Custodian Investment chief executive commended the regulators and industry stakeholders for their efforts to strengthen the two sectors, but stressed the need for sustained collaboration to address emerging challenges.
Earlier, the Chairman of NAIPE, Ebere Nwoji, said the recapitalisation of the insurance and pension sectors had the potential to significantly strengthen their ability to support individuals, businesses and the wider economy.
Nwoji said the substantial capital raised by operators must now be deployed prudently to generate sustainable returns for investors while increasing the sectors’ contribution to economic growth.
She said the recently concluded insurance recapitalisation exercise had placed insurers in a stronger position to underwrite larger risks and provide greater financial protection to individuals and businesses.
She urged Nigerians to take advantage of the increased financial capacity of insurance companies by purchasing appropriate insurance policies, stressing that effective risk transfer remained essential to protecting households and businesses from financial shocks.
Nwoji also said the ongoing recapitalisation of the pension sector, which is expected to be concluded by July 2027, presented an opportunity to strengthen Nigeria’s retirement system.
She expressed optimism that the exercise, alongside other reforms, would improve the capacity of Pension Fund Administrators (PFAs) to safeguard workers’ retirement savings and generate better investment returns.
According to her, stronger pension institutions would ultimately contribute to improved financial security for Nigerians during retirement.
She stressed that the enlarged capital bases of operators in both sectors must be managed and invested wisely to deliver sustainable returns and produce tangible benefits for policyholders, pension contributors and the wider economy.
