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Chuks Udo Okonta
With the proposed increase in capital as provided by the Nigerian Insurance Industry Reform Bill, Nigerian insurance companies will be one of the most capitalised in Africa and this should boost our ability to deploy capital to writing risks across Africa, the Chairman of Nigerian (NIA) Insurers Association Kunle Ahmed, has said.
He disclosed this at the NIA’s recently held quarterly media briefing in Lagos, stating that the Nigerian insurance industry recognizes the immense opportunities presented by the African Continental Free Trade Area (AfCFTA) and plans are at an advanced stage to explore them.
“A key focus of this initiative is on developing insurance products that cater to businesses operating across multiple African countries. This includes coverage for trade, investments, and multinational clients.
“The industry aims to capitalize on the AfCFTA’s Trade in Services protocol, which offers opportunities for increased financial integration and cross-border operations,” he posted.
The NIA Chairman noted that the proposed significant increase in the minimum capital requirements for insurance companies (non-life: N15 billion, Life: N10 billion, Reinsurance: N35 billion) will enhance the financial capacity of insurers to underwrite larger risks, improve their solvency and increase public confidence in their ability to meet obligations, adding that it also aims to improve the industry’s retention capacity and reduce reliance on foreign reinsurance.
According to him, currently, Nigerian insurers are considering establishing commercial presence in other African countries to tap into new markets directly, adding that NAICOM has urged Nigerian brokers, loss adjusters and insurers to improve their value proposition, professionalism and service delivery to remain competitive in the expanded African market.
Ahmed remarked that
having recognized the need for a skilled workforce, the industry is emphasizing capacity building in areas like risk management, underwriting and claims administration to meet the demands of a larger and more integrated market. “We will also embrace digital technology, which is seen as crucial for Nigerian insurers to operate efficiently across borders and enhance customer service delivery in a wider market,” he said.
He stated that cybersecurity is also a key consideration in this digital shift, stating that NAICOM is also committed to bilateral negotiations with other African regulators, underpinned by mutual recognition agreements, to ease cross-border operations and ensure regulatory alignment.
He submitted that the industry recognizes the need for the harmonization of insurance regulations across African member states to reduce operational complexities and facilitate seamless cross-border service delivery, whilst it urges insurance operators, loss adjusters and brokers to research and understand the regulatory frameworks in different African countries to operate effectively within the AfCFTA.
The success of these plans, he said would be crucial for positioning Nigeria as a leading player in the African insurance market under the AfCFTA framework.
