THE National Insurance Commission (NAICOM) has expressed concerns over the impact of inflation on the insurance sector, as rising prices affect both policyholders and insurers.

The Commissioner for Insurance/Chief Executive Officer, NAICOM, Olusegun Omosehin, expressed the view in a keynote address presented at the Insurance Meets Tech (IMT) 2024 in Lagos.

Speaking on the theme, ‘Revitalising the Insurance Industry to Risk-Manage Nigeria’s One-Trillion-Dollar Economic Aspiration,’ Omosehin said for insurance companies, inflation makes it difficult to operate profitably, especially if claims costs increase due to inflation.

He called on insurers to carefully manage their investment portfolios, adapt pricing strategies and maintain adequate reserves to mitigate the challenges posed by inflation.

The CFI, who was represented by the Head, Lagos Control Office of NAICOM, Julius Odidi, reiterated that NAICOM plays a vital role in fostering innovative business solutions that address pressing economic and social issues in Nigeria’s insurance sector.

He added that the commitment extends to ensuring prompt settlement of legitimate claims, promoting market growth through innovation and driving commercial value within the industry.

In achieving the objective of revitalising the insurance industry, Omosehin said stakeholders must of necessity address the fundamental issues plaguing the sector, like low insurance penetration, lack of public trust, market fragmentation, regulatory reforms and digital transformation and adaptation.

He submitted that “While the surge of COVID-19 raged in year 2020-2021 threatening global safety and testing the abilities, resilience and preparedness of nations globally to deal with the unexpected outbreak, the pandemic highlighted the need for digitalisation.

“In the insurance sector for instance, while lockdowns negatively impacted traditional distribution channels, they also encouraged insurers to develop digital offerings. This has come to show that investing in technology, online platforms and mobile apps can improve customer experience and accessibility.”

According to him, revitalising the Nigerian insurance industry to risk-manage Nigeria’s $1 trillion economy literally speaks to the insurance industry’s readiness and preparedness to de-risk the activities that is projected to galvanize productivity, innovations, economic growth and development.

He said: “With the rapid changes in technology and economic/business environment, this discuss is not just timely but also topical to reawaken the need for our dear industry to rise up to the current realities of what is expected of us as an industry.”

The CFI highlighted that the insurance sector must embrace innovation to meet up with the rapid market changes, changes in consumers’ preferences, tastes and lifestyle.

Omosehin said: “We must develop products that meets the demands of our market as innovation have taken the driving force in the financial services sector,” stressing that more critical to the theme is the issue of financial soundness and stability of insurance institutions, as a strong financial base is key to the success of the insurance industry.

He said having sufficient capital that is commensurate to the risk of an insurer has become inevitable if the industry is to meet up with up with the consequential effect of a growing economy, managing a one trillion economy and competing with its counterparts across the globe in management of risks.

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