Recapitalisation Must Improve Claims Payment, Retirement Benefits, Regulators Tell Operators

By LOVETH-AZODO CHIJIOKE, Lagos

The National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) have challenged insurance companies and pension operators to translate recapitalisation into improved claims settlement, better retirement benefits and stronger financial protection for Nigerians.

The regulators made the call at the 11th Annual Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos on Thursday. The conference was themed, “Post-Recapitalisation Market Dynamics in Insurance and Pension Sectors.”

Speaking at the event, the Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Olusegun Omosehin, said the successful completion of insurance recapitalisation marked the beginning of a new phase for the industry, with operators expected to deploy their strengthened capital prudently and improve service delivery.

He said insurers must look beyond meeting minimum capital requirements to strengthening their balance sheets, improving risk management and ensuring prompt settlement of legitimate claims.

According to him, insurance companies must align their assets with their liabilities and maintain adequate, liquid and diversified investments to meet their obligations to policyholders.

Omosehin also urged operators to adopt disciplined investment policies, strengthen corporate governance and improve their risk management frameworks to protect their enlarged capital bases.

He warned that although increased capital would provide insurers with greater capacity to expand their businesses and underwrite larger risks, growth without adequate controls could undermine the gains of recapitalisation.

The commissioner identified risk-based supervision as a key regulatory priority, urging insurers to strengthen enterprise risk management, actuarial capabilities and stress-testing frameworks ahead of the industry’s transition towards risk-based capital requirements.

He said the ultimate measure of recapitalisation would be its impact on policyholders, particularly through efficient claims settlement, which he described as essential to rebuilding public confidence and encouraging wider participation in insurance.

Omosehin further called for stronger board oversight, accountability, ethical leadership and regulatory compliance, noting that increased capital must be supported by effective governance structures.

He also identified technology, digital distribution and human capital development as important drivers of growth, urging insurers to invest in digital platforms and build professional expertise in actuarial science, investment management, technology and risk management.

According to him, these capabilities would be necessary to manage larger balance sheets and increasingly complex risks while building a more resilient, transparent, innovative and customer-focused insurance industry.

Similarly, the Director-General of PenCom, Ms Omolola Oloworaran, warned pension operators that had yet to meet the recapitalisation requirements to do so urgently.

“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 recapitalisation was necessary to strengthen regulated institutions and improve their capacity to withstand economic and financial shocks, given the critical role insurance and pension operators play in protecting Nigerians’ financial security.

She, however, stressed that stronger institutions and larger pension assets would mean little if contributors and retirees did not experience tangible improvements in service delivery and retirement outcomes.

“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.

The PenCom boss said the Commission was shifting its focus from merely accumulating pension assets to ensuring that the funds were allocated effectively to generate better returns for contributors.

She urged insurance and pension editors to hold regulators and operators accountable by asking critical questions about how policies and reforms affect Nigerians.

Oloworaran commended NAIPE for providing a platform for dialogue among regulators, operators and the media, adding that PenCom would continue to use its regulatory tools to strengthen the pension system and build public confidence.

Also speaking, the Group Managing Director and Chief Executive Officer of Custodian Investment Plc, Mr Wale Oshin, called for stronger collaboration between insurance companies and pension operators to improve retirement security and protect retirees.

He said cooperation should extend beyond regulators to operators and other stakeholders, particularly in addressing the interests of retirees and annuity holders.

According to him, recapitalisation presents an opportunity to strengthen institutions, improve resilience, support technology investments and enhance operators’ capacity to meet long-term obligations.

However, Oshin cautioned that raising capital alone was insufficient, stressing that the real value of recapitalisation would be determined by the quality of services and benefits delivered to customers.

He urged operators to build sustainable businesses rather than focus solely on meeting regulatory requirements, while calling for greater attention to annuities and retirement income.

Oshin warned that inadequate retirement benefits could undermine public confidence in the pension system and urged sustained engagement among industry stakeholders to address emerging challenges.

Earlier, the Chairman of NAIPE, Ebere Nwoji, said recapitalisation in the insurance and pension sectors would strengthen their capacity to support individuals, businesses and the wider economy.

She said the substantial capital raised by operators must be deployed prudently to generate stronger returns and contribute meaningfully to economic growth.

According to Nwoji, the recently concluded insurance recapitalisation exercise had positioned insurers to underwrite larger risks and provide greater protection for individuals and businesses.

She urged Nigerians to take advantage of the increased financial strength of insurance companies by purchasing appropriate insurance policies, noting that effective risk transfer would provide greater financial security for individuals, families and businesses.

Nwoji also said the ongoing pension-sector recapitalisation, expected to be concluded by July 2027, presented an opportunity to strengthen the retirement system.

She expressed optimism that the exercise would improve the capacity of Pension Fund Administrators (PFAs) to safeguard workers’ retirement savings and generate better returns, helping contributors achieve greater financial security after their years of service.

She stressed that the enlarged capital bases of both sectors must be invested wisely to deliver sustainable returns and meaningful benefits to Nigerians.