Insurers’ Committee: NAICOM advances risk-based capital, product, actuarial development
Chairman, Nigerian Insurers Association, Mrs. Ebelechukwu Nwachukwu,
Nike Popoola
The National Insurance Commission (NAICOM) has commenced preparations for the introduction of a risk-based capital (RBC) framework for insurance companies, while promoting improved claims settlement, digitalisation and the development of actuarial capacity in Nigeria’s insurance industry.
The Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, disclosed this at the latest meeting of the Insurers’ Committee held in Lagos on Thursday, October 8, according to the outgoing Chairman of the Committee’s Communications and Stakeholders Engagement Sub-Committee, Ebelechukwu Nwachukwu.
Nwachukwu, who spoke during a virtual press briefing in Lagos on Tuesday, said NAICOM had appointed EY to support the development of the RBC framework and guide the industry through a transparent implementation process.
She explained that the framework would ensure that insurance companies maintained capital commensurate with the risks they underwrote, thereby strengthening their financial soundness.
According to her, EY made a high-level presentation on the framework to chief executives at the meeting, while further engagements would be organised to deepen operators’ understanding. She added that the draft framework would be shared with industry stakeholders for review before its adoption by NAICOM.
Nwachukwu said the commissioner congratulated the 50 insurance companies that emerged from the recapitalisation exercise following the July 31 deadline.
She quoted Omosehin as urging insurers to translate their strengthened capital positions into improved underwriting capacity, particularly as the reinsurance renewal season approached. He also encouraged operators to ensure improved claims settlement, expand market penetration and adopt disciplined investment practices.
The commissioner called on insurance company boards to take greater interest in the activities of their managing directors, stressing the importance of sound corporate governance in the transformed industry.
Nwachukwu said operators were encouraged to prepare for the RBC framework by conducting internal assessments of their underwriting capacities and reviewing their underwriting manuals, reserving policies, reinsurance arrangements and internal controls.
She added that NAICOM was accelerating the digitalisation of its operations and services, urging insurance companies to embrace digital solutions to facilitate seamless engagement with the regulator. The commission has also published its Service Charter on its website.
The commissioner further encouraged operators to develop health insurance products and build capacity to provide cover for emerging risks, including climate and cyber risks.
On actuarial development, Nwachukwu disclosed that discussions were ongoing on the establishment of a Joint Actuarial Development Fund to support the growth of actuarial expertise in Nigeria.
She said NAICOM had committed to supporting the fund, while operators were reviewing the funding formula and exploring assistance from external organisations. The initiative is expected to support universities and strengthen the development of actuarial capacity in the country.
Nwachukwu also announced a leadership change in the Communications and Stakeholders Engagement Sub-Committee, saying the responsibility had been transferred to Moruf Apampa following her emergence as chairman of the Nigerian Insurers Association.
She urged industry stakeholders to support Apampa in driving communication and engagement initiatives for the recapitalised insurance industry.
