NAICOM Identifies Technology as the Driving Force for Insurance Sector Growth

The National Insurance Commission (NAICOM) has reiterated that technology adoption remains the most critical factor in repositioning Nigeria’s insurance sector for growth, efficiency, and long-term relevance. With the financial services industry rapidly evolving in the digital era, NAICOM insists that the insurance sector cannot afford to lag behind if it must deliver value to customers, strengthen regulatory compliance, and expand its contribution to the economy.

Commissioner for Insurance, Sunday Thomas, who spoke at a recent industry dialogue, explained that technology is no longer an optional tool but a necessity. According to him, the global insurance landscape has been transformed by digital innovation, from underwriting to claims processing, and Nigeria must follow suit if it wants to increase penetration and consumer trust. He noted that for years, complaints around delayed claims, lack of transparency, and limited accessibility have dampened public confidence in the industry. Technology, he argued, provides the most sustainable solution to those challenges.

Thomas stated that with artificial intelligence, blockchain, and big data analytics, insurers can strengthen risk assessment models, detect fraud early, and provide tailor-made products for different segments of society. He emphasized that digital channels such as mobile applications, web-based platforms, and automated payment systems can bridge gaps between insurers and underserved populations, particularly in rural areas where awareness and accessibility remain low.

Nigeria’s insurance penetration has historically hovered below 2 percent, one of the lowest globally. Analysts argue that this low figure is tied to trust issues and poor customer experience. NAICOM believes that deploying digital solutions will not only help companies reach more Nigerians but also improve their reputation. The Commission has already introduced regulatory sandboxes to allow firms to test-run new technology-driven products without the risk of penalties. This, Thomas said, is part of efforts to encourage innovation while safeguarding policyholders’ interests.

Industry operators have welcomed NAICOM’s call, with some insurers already experimenting with new digital platforms. A few companies have rolled out apps that allow customers to purchase policies, track claims, and receive updates in real time. Others have partnered with fintechs to extend microinsurance products to low-income earners, leveraging mobile technology to drive affordability and ease of access.

However, there are concerns about infrastructure and cost. Smaller insurers often lack the resources to deploy cutting-edge systems. To address this, NAICOM has pledged to work with stakeholders to provide frameworks that support gradual adoption. The Commission has also highlighted the importance of training and reskilling staff to manage new tools effectively. Without building human capacity, the full benefits of technology adoption may not be realized.

Cybersecurity is another area NAICOM has flagged. With increased digital activity comes higher risks of cyber fraud, hacking, and data breaches. The Commission has urged companies to prioritize cybersecurity investments and adopt international best practices in data protection. This is particularly important given the sensitivity of customer information handled by insurers.

The renewed emphasis on technology is in line with Nigeria’s broader digital transformation agenda, which has seen the banking sector experience exponential growth in mobile and online transactions. Analysts say insurance can mirror this progress if it embraces the same level of innovation. The sector’s growth, they argue, would not only improve financial inclusion but also strengthen Nigeria’s economic resilience.

Beyond efficiency, NAICOM also linked technology adoption to regulatory oversight. Automated reporting systems will make it easier for regulators to track compliance, reduce human interference, and provide accurate real-time data for decision-making. This will help build a transparent industry where operators are accountable, and customers can be confident that policies are managed according to established rules.

Insurance experts note that digital adoption could also open new business models. Products such as usage-based motor insurance, health insurance driven by wearable technology, and agricultural insurance supported by satellite imagery are already gaining traction globally. If Nigeria positions itself properly, it can tap into these innovations to expand its product range and relevance in a changing world.

Thomas concluded by stressing that the insurance sector must align with changing consumer behavior. Younger generations, who make up the largest share of Nigeria’s population, demand convenience, speed, and transparency in financial services. Meeting these expectations will require insurers to think beyond traditional paper-based models and embrace end-to-end digital solutions.

With the Commission’s support, operators are expected to gradually close existing gaps and bring the industry in line with international benchmarks. The expectation is that over time, insurance penetration will rise significantly, and the sector will play a more prominent role in stabilizing Nigeria’s economy.

NAICOM’s renewed push for technology adoption sends a clear signal that the era of manual processes and delayed service delivery is drawing to a close. The challenge now rests on insurance companies to rise to the occasion, invest in digital tools, and rebuild public trust in an industry that has long underperformed.