With the release of new operational guidelines for insurtech businesses, the National Insurance Commission (NAICOM) has signalled a decisive shift toward technology-driven transformation in Nigeria’s insurance industry.
The guidelines, which came into effect on August 1, 2025, mark a significant milestone in modernising the regulatory landscape and enabling the widespread adoption of digital solutions in underwriting, claims management, product distribution, and customer service.
Insurtech—a fusion of “insurance” and “technology”—refers to the innovative use of tools such as artificial intelligence (AI), big data analytics, blockchain, and the Internet of Things (IoT) to boost efficiency, reduce costs, and enhance user experience. These solutions are expected to disrupt traditional models and reposition insurance as a growth catalyst in Nigeria’s financial services space.
Industry analysts have described NAICOM’s move as a green light for operators to fully integrate digital models and break away from the outdated, labour-intensive processes that have long hindered the industry’s growth.
Disrupting the Old to Welcome the New
Prior to the release of the guidelines, Nigerian insurers had already begun experimenting with digital tools, especially during the COVID-19 pandemic, which forced businesses to pivot to remote operations.
The limitations of the traditional model—dependent on brokers and agents for outreach, slow claims processing, opaque policy language, and limited product innovation—had long held the industry back.
These models proved inadequate for widespread market penetration, as physical agents were constrained by geography, cost, and manpower. Many Nigerians remained unaware of the value of insurance, while others were discouraged by poor service experiences.
The 2019 industry conference themed “Disruption Through the Use of Modern Technology” underscored growing awareness among operators of the need for transformation. Participants concluded that the industry’s long-standing stagnation could only be overcome by dismantling legacy systems in favour of innovative, tech-based approaches.
Learning from Global Insurtech Leaders
Globally, insurtech has become a competitive differentiator. According to Srithin Nair, Senior Technical Consultant at Accelerite Business Unit, digital transformation has revolutionised the way insurers manage risk, engage customers, and design products.
Citing a Swiss Re report, Nair said global insurance premiums are expected to more than double between 2024 and 2034, with insurance penetration rising from 3.8% to 4.5% over the same period—thanks largely to digital advancements.
However, he also acknowledged the challenges: evolving regulations, intensified competition, and the entry of new players have reshaped the operating environment. Traditional insurers now face pressure to adapt or risk obsolescence.
What the New Guidelines Offer
NAICOM stated that the insurtech guidelines were developed through broad stakeholder engagement and are intended to:
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Foster innovation in the development of new products and services
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Enhance consumer experience through faster and more transparent processes
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Ensure regulatory clarity and reduce ambiguity for new entrants and incumbents
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Strengthen consumer protection and provide dispute resolution mechanisms
Notably, the guidelines include clear protocols for arbitration between insurers and their insurtech partners, as well as channels for consumer complaints to be escalated directly to the Commission.
Balancing Tech with Human Expertise
Despite the enthusiasm for digital transformation, concerns remain about the potential impact on employment and the risk of technology providers gradually dominating the industry.
Mr. Casmir Azubuike, Managing Director of Afriglobal Insurance, welcomed the technological shift but cautioned against sidelining human capital. “AI and automation are powerful tools, but they can’t fully replace the human workforce,” he said.
Azubuike highlighted that while AI can streamline many operational tasks, it still requires human oversight—particularly in a country like Nigeria where digital literacy remains uneven. He cited incidents from the COVID-19 pandemic, where AI-driven delivery systems in some countries failed due to lack of human adaptability.
“Technology will enhance insurance operations, not eliminate the people behind them,” he concluded.
Looking Ahead
With a regulatory green light and growing momentum among insurers, the future of Nigeria’s insurance sector appears to be on the verge of a digital renaissance. The successful integration of insurtech could unlock higher market penetration, improve public trust, and drive sustainable growth.
However, the journey must balance innovation with inclusion, efficiency with ethics, and technology with the irreplaceable human touch.
