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NDIC commences payment to Heritage Bank’s depositors



By Esther Agbo

The Nigerian Deposit Insurance Commission (NDIC) has begun the liquidation process of failed Heritage Bank, with verification and payment of deposits to the bank’s customers.

This is happening after its appointment as liquidator of the Bank, by the Central Bank of Nigeria.

Recall that the Central Bank of Nigeria (CBN) revoked Heritage Bank’s license over its failure to improve its financial performance despite supervisory steps.

In a signed statement by the Acting Director of Corporate Communication, Hakama Sidi Ali, the CBN said, “This action has become necessary due to the Bank’s breach of Section 12 (1) of BOFIA, 2020. The board and management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.

“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby, making the revocation of the license the next necessary step.”

As the appointed liquidator, depositors will get up to N5 million, using their Bank Verification Number to locate their alternate account.

This was made known in a statement issued by NDIC, signed by the Director, Communication & Public Affairs of the Corporation, Bashir Nuhu.

The statement read, “Depositors of the bank that have an alternate account within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number to locate their alternate account. Depositors with funds in excess of N5 million will be paid liquidation dividends upon realisation of the bank’s assets and recovery of debts owed to the bank.

“All depositors of the defunct bank without alternate bank account in the industry are advised to visit the nearest branch of the bank with proof of account ownership, verifiable means of identification such as driver’s license, permanent voter’s card, National Identity Card, together with their alternate account and Bank Verification Number for the verification of their deposits and subsequent payment of insured sums or file an online claim on the NDIC website.”

The Corporation urged the bank’s creditors to visit the nearest branch of the bank to file their claims or via the online platform.

“The NDIC wishes to assure the entire banking public of its commitment to the continuous safety of depositor’s funds in all licensed banks. As such, depositors are urged to continue their banking businesses without fear, as banks whose licences have not been revoked remains safe and sound.”

In addition, the House of Representative’s spokesman, Akin Rotimi in a statement noted that the house is fully aware of the Heritage Bank’s license revocation and has pledged to engage with stakeholders to ensure depositor’s funds are protected and the financial system remains stable.

“We assure the public, particularly depositors and stakeholders of Heritage Bank, that the House is committed to carrying out its constitutional oversight functions to ensure that this development does not negatively impact Nigerians. The relevant House Committees on Banking Regulations and Insurance will be up to their duty, to thoroughly examine the circumstances surrounding this decision and the subsequent steps taken by the NDIC.

“Our priority is to safeguard the interests of all depositors and maintain the stability of the financial system. We will engage with the CBN, NDIC, and other relevant stakeholders to ensure a transparent and orderly resolution process, providing necessary support to mitigate any potential negative impact on the public.

“We urge the CBN and NDIC to establish clear channels of communication to allay the fears of the public and prevent any loss of trust in our financial system. Effective public engagement is crucial to maintaining confidence during this period.”

Contributing, the Chairman of the House Committee on Banking Regulations, Mohammed El-Rufai, added, “The committee will closely monitor the liquidation process to ensure that the rights of depositors are protected and that the process adheres to the highest standards of transparency and accountability.”

While the Chairman of the Committee on Insurance and Actuarial Matters, Ahmed Jaha, in his statement said, “We will work diligently to oversee that the NDIC executes its mandate effectively, ensuring the protection of depositor’s funds and maintaining confidence in the financial sector. The NDIC Act and the Banks and Other Financial Institutions Act are clear in their provisions that depositor’s funds are insured and protected.”

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One year under Tinubu: Growth ahead as gross premium income exceeds N1trn



…Microinsurance products receive boost

By Esther Agbo

As Nigeria navigates through the first year of Tinubu’s administration, various sectors have experienced shifts and transformations.

Among them, the insurance industry stands as a critical yet often overlooked sector that plays a vital role in the nation’s economic, resilience and growth. Delving into the intricate details of how the insurance industry has fared under Tinubu’s regime reveals a tapestry of progress, challenges, and opportunities that shape the future of financial security in Nigeria.

One year into Bola Tinubu’s presidency, Nigeria’s insurance industry finds itself at a pivotal juncture. As a sector that historically lagged behind in terms of penetration and public confidence, the past year has seen a mixture of achievements and ongoing challenges.

Ratings agency Agusto & Co. reported that Nigeria’s insurance industry had a strong fiscal year in 2023, with gross premium income (GPI) exceeding N1 trillion.

Despite challenges from elections and policy reforms, the industry maintained significant growth. The 2024 Insurance Industry Report, titled ‘The Nigerian Insurance Industry- Navigating the Turbulent Terrain,’ highlighted that elevated investment income, driven by foreign exchange gains and rising interest rates, is expected to boost growth in FY 2024.

The report noted that insurance penetration remains low at 0.4 percent, but regulatory support and premium rate adjustments have driven industry growth. Increased third-party insurance rates and higher comprehensive coverage requirements contributed significantly to the GPI rise. Depreciation of the naira also boosted premiums from foreign currency policies, particularly in the oil and gas sector.

Claims payouts rose in 2023 due to higher replacement costs and policyholder claims. However, the industry’s performance is expected to improve with increased GPI moderating claim growth. Investment income saw significant gains in 2023 due to higher interest rates and foreign exchange gains from Eurobonds and USD mutual funds, leading to an estimated 12.2 percent return on investment compared to 7.3 percent in 2022.

In 2024, Agusto & Co. anticipates higher investment income due to the Central Bank of Nigeria’s 400 basis points monetary policy rate hike depicting a surge in interest rates, particularly on government securities and placements which dominate the industry’s investment portfolio and a bullish equities market.

The industry is expected to benefit from improved underwriting performance and regulatory support, with NAICOM continuing to implement policies for industry viability. The shift to a risk-based capital regime is also expected to progress despite previous delays.

The equities market has also garnered the attention of many investors after the NGX’s all-share index posted a 45.9 percent return in 2023 and went on a bullish run in the first two months of 2024.

Insurance penetration

Since President Tinubu assumed office, insurance penetration in Nigeria has continued to struggle with longstanding issues, showing little significant improvement. Insurance penetration, which refers to the ratio of total insurance premiums to the gross domestic product (GDP), has remained low, consistently hovering around 0.5 percent to 1 percent. This is well below the global average of 6 percent and even lower than the African average of 3 percent.

Despite various initiatives and regulatory changes aimed at boosting the sector, the performance has been lacklustre. The Tinubu administration has attempted to revitalise the economy and, by extension, the insurance sector, but these efforts have not yet translated into substantial growth in insurance uptake among Nigerians.

Current estimates suggest that less than 1 percent of Nigerians have any form of life insurance, despite government policies aimed at boosting coverage. However, the past few years have seen some progress, as gross premiums have gone from N326 billion in 2016 to N726.4 billion in 2022, with life insurance seeing the most growth. This low percentage highlights the vast untapped potential within the Nigerian insurance market. Factors contributing to this include a lack of awareness, cultural beliefs, and economic constraints that limit individuals’ and businesses’ ability to invest in insurance products.

Talking about Automotive Insurance, data sourced from the Federal Roads Safety Corps (FRSC) and the Nigerian Insurers Association (NIA) revealed that there are 12 million vehicles plying roads across the country of which only 3.11million were insured as at the end of 2023, indicating only 25 percent of vehicles are currently insured.

The population of insured vehicles dipped from 3.70 million in 2022 to 3.11million in 2023, showing that, about 600,000 vehicles failed to renew their insurances when their previous coverage expired, owing to tough operating business atmosphere and increasing cost of living that has made Nigerians  relegate insurance in their scale of preference.

This figure, while indicating a higher uptake compared to other insurance sectors, still reflects significant room for growth. Mandatory third-party motor insurance laws have spurred some compliance, but enforcement remains a challenge, leading to widespread underinsurance and uninsured vehicles on the roads.

Health insurance, a critical component for safeguarding citizens’ well-being, has seen gradual improvements. Since the beginning of President Bola Tinubu’s administration, the percentage of Nigerians covered by health insurance has remained low. Recent data indicates that only about 8-9 percent of Nigerians are currently covered by health insurance, leaving over 90 percent without coverage.

This highlights a significant gap in healthcare accessibility and affordability for the majority of the population.

The government has initiated efforts to expand health insurance coverage. For example, around 750,000 additional Nigerians have been enrolled in health insurance schemes since the start of Tinubu’s administration. Despite these efforts, the overall coverage remains insufficient, underscoring the need for more robust and inclusive health insurance policies to achieve universal health coverage.

Government schemes such as the National Health Insurance Scheme (NHIS) have made strides in expanding access, but challenges such as limited reach in rural areas and the informal sector’s dominance impede broader coverage. Efforts to enhance public-private partnerships and introduce innovative health financing models are crucial for achieving more inclusive health insurance penetration.

Global standing: Nigeria’s place in the insurance world

On the global stage, Nigeria’s insurance industry ranks low, reflecting its nascent state and the challenges it faces. Among African nations, Nigeria is positioned behind South Africa, Kenya, and Morocco, which boast more mature and robust insurance markets. The need for regulatory reforms, technological advancements, and enhanced consumer trust is paramount for Nigeria to elevate its standing and competitiveness in the global insurance arena.

The role of the Insurance Commission  (NAICOM)

The National Insurance Commission (NAICOM) was established in 1997 by the National Insurance Commission Act 1997 with responsibility for ensuring the effective administration, supervision, regulation and control of insurance business in Nigeria and protection of insurance policyholders, beneficiaries and third parties to insurance contracts.

However, stating their primary role through their X (formerly Twitter) handle as to effectively administer, supervise, regulate and control the Nigerian Insurance Industry in order to protect insurance consumers and support financial stability, Insurers aren’t taking it likely as most complain about the non performance of the commission.

Some complain of insurance companies withholding their claim, while others murmur about how insurance companies have been defaulting in pension payments for their annuities since February, 2023.

NAICOM has been urged to intervene and provide solutions to these challenges.

Root causes of low penetration

Several factors contribute to the low insurance penetration in Nigeria. A key issue is the lack of awareness, as many Nigerians are not informed about the benefits and importance of insurance, resulting in disinterest and neglect in considering insurance products.

Economic constraints also play a significant role. High poverty rates and economic instability reduce disposable income for individuals and businesses, making insurance a lower priority.

Cultural beliefs further contribute to low penetration, with many Nigerians preferring traditional risk-sharing mechanisms within their communities over insurance.

A trust deficit exists due to a history of fraud and mismanagement in the insurance industry, which has eroded public confidence and discouraged potential policyholders.

Finally, regulatory challenges, including inefficiencies and lack of stringent enforcement, hinder the industry’s growth and development.


One of the notable achievements under President Tinubu has been the push for regulatory reforms and digital transformation within the insurance sector. The National Insurance Commission (NAICOM) has introduced several measures aimed at enhancing transparency and efficiency. These reforms include the digitisation of regulatory processes, which has streamlined operations and reduced bureaucratic bottlenecks.

The adoption of digital technologies has also facilitated better customer engagement and service delivery. Insurers have increasingly embraced online platforms for policy issuance, premium collection, and claims processing, making insurance more accessible to a tech-savvy younger population.

Efforts to increase insurance penetration, which historically hovered around a mere 0.5 percent of GDP, have shown some promise. Government initiatives aimed at raising awareness about the importance of insurance have started to bear fruit. Public campaigns and collaborations with financial inclusion programs have begun to demystify insurance for the average Nigerian.

Additionally, microinsurance products tailored to low-income earners and the informal sector have gained traction. These products, which offer affordable premiums and simplified coverage options, are designed to cater to the needs of a larger segment of the population, thus expanding the insurance market.

Foreign investment and partnerships

The Tinubu administration has also been proactive in attracting foreign investment into the insurance sector. Strategic partnerships with international insurance firms and investors have brought in much-needed capital and expertise. These collaborations have not only enhanced the financial stability of local insurers but have also introduced global best practices, raising the standards of the industry.

Challenges and weaknesses

The insurance market in Nigeria is highly concentrated, with a few large players dominating the sector. This limits competition and innovation, making it harder for smaller companies to thrive and offer more diverse and attractive products.

Despite these achievements, the industry continues to grapple with low consumer trust and the general lack of awareness and understanding of insurance products among the populace. Historical instances of claim denials, delays in settlements, and perceived lack of transparency have left many Nigerians sceptical of insurance companies. Building trust remains a significant challenge, as insurers must consistently demonstrate reliability and integrity in their dealings with clients.

Though regulatory reforms have made progress, they still face issues of enforcement and compliance. There are gaps in the implementation of compulsory insurance policies, and the sector suffers from inadequate regulatory oversight and inefficiencies.

Some industry players have expressed concerns over regulatory overreach and the pace of reforms. Smaller insurance firms, in particular, struggle to keep up with the regulatory demands, which can be costly and time-consuming.

Operational challenges, such as inadequate infrastructure and a shortage of skilled professionals, further hamper the industry’s growth. Insurers often face difficulties in reaching rural and underserved areas due to poor road networks and limited digital connectivity.

Nigeria’s broader economic environment has also posed challenges for the insurance sector. Inflation, currency volatility, and economic uncertainties have affected the disposable income of many Nigerians, making it difficult for them to afford insurance premiums. The economic downturn has also impacted the investment portfolios of insurance companies, affecting their financial performance and stability.

While there has been some progress in introducing new products, the pace of innovation remains slow. Many insurance products are still seen as too rigid and not tailored to the unique needs of different customer segments. There is a growing demand for more customised and flexible insurance solutions that can adapt to the changing lifestyles and risk profiles of Nigerians.

However, the traditional distribution channels for these insurance products are also limited, and there is a slow adoption of digital channels that could potentially increase reach. Many Nigerians, especially those in rural areas, do not have access to insurance services.

The way forward

While the Tinubu regime has faced significant challenges in improving insurance penetration in Nigeria, addressing these issues through strategic policies, regulatory reforms, and innovative solutions can pave the way for a more robust insurance sector.

There is a need for comprehensive awareness campaigns to educate the public on the importance and benefits of insurance. Collaborations between the government, regulatory bodies, and insurance companies can help in disseminating information effectively.

The government should also focus on policies that stabilise the economy, reduce inflation, and increase the disposable income of citizens. A stable economic environment would make it easier for individuals and businesses to invest in insurance.

Improving and strengthening regulatory frameworks and ensuring strict compliance can help build trust in the insurance sector. The National Insurance Commission (NAICOM) should enhance its monitoring and enforcement capabilities to ensure better adherence to insurance policies.

Moreover, Insurance companies need to innovate and develop products that are simple, affordable, and relevant to the needs of Nigerians. Microinsurance and tailored products for specific sectors like agriculture can help increase penetration.

Embracing digital transformation is also very important. Expanding digital distribution channels and leveraging technology can make insurance more accessible and convenient, especially for the underserved rural population.

Lastly, collaborations between the government and private sector can lead to the development of initiatives that promote insurance penetration. For example, integrating insurance with other financial services or government programs can increase uptake.

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NAICOM moves to boost insurance penetration in Nigeria



By Esther Agbo

The National Insurance Commission (NAICOM) has unveiled plans to increase the number of insurance agents in Nigeria to boost insurance penetration, which in 2022 industry survey by Augusto and Co, stands at less than 1 percent, one of the lowest in Africa.

According to NAICOM’s National Commissioner for Insurance, Olusegun Omosehin, during his recent visit to the executives of the Association of Registered Insurance Agents in Lagos, the commission aims to increase the number of agents from 50,000 to 300,000 by 2025 and eventually to three million.

This move is expected to drive growth in the insurance sector, following the example of successful insurance markets worldwide.

However, despite the low penetration, the industry saw a significant growth of 27 percent in gross premiums in Q4 2023, reaching N1 Trillion. NAICOM attributes this growth to the critical role of agents in driving insurance growth.

Omosehin emphasised the need for agents to act as catalysts for growth, stating, “In nations across the globe where insurance is thriving, agents act as catalysts, driving the growth. Similar steps need to be taken to grow insurance in Nigeria.”

The National President of the Association of Registered Insurance Agents of Nigeria (ARIAN), Olakunle Odewunmi, commended NAICOM for recognising the role of agents in the insurance value chain and urged the commission to address some of the challenges facing agents, which includes but not limited to licensing issues.

Reacting, Omosehin pledged to urgently address the challenges on or before the end of next month and as well set a new tone for the industry to contribute to Nigeria’s economic growth, aiming to achieve a $1 trillion economy as projected by President Bola Tinubu.

This development is however seen as a positive step towards deepening insurance penetration in Nigeria and positioning the industry to play a pivotal role in achieving the country’s economic goals.

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Insurance: Number of unpaid claims worrisome – NAICOM



The Commissioner For Insurance, Mr Sunday Thomas, says recent efforts by NAICOM to review status of claims in the books of insurance companies and findings during onsite examination,  reveals  worrisome number of outstanding claims.

The commissioner also charged  Boards of insurance companies to support measures put in place by the regulator to tackle  challenges of unpaid claims.

Thomas, also the Chief Executive  Officer, National Insurance Commission (NAICOM) said this at the 2023 Insurance Directors’ Conference organised by the College of Insurance and Financial Management (CIFM) in Lagos.

The theme of the conference is: “The Board and Insurance Business Sustainability”.

According to him, the commission working with members of the Insurers’ Committee, have taken decisions and incepted measures designed to tame the menace of unpaid claims.

“We call on members of the boards of insurance institutions to support these measures by putting in place policies designed to tackle the menace.

“The commission will not hesitate to consider other regulatory measures to address the menace, ” he said.

Thomas highlighted some of the high-level issues observed by the commission during its just concluded  fourth batch of the onsite examination of some insurance institutions, using the risk-based supervision methodology.

The commissioner stated that NAICOM observed that some insurance firms embarked on inadequate policies and procedural manuals, and in some cases, non adherence to these policies where they existed.

He said some of the policies were not reflective of the specific requirements of extant regulations such as the Prudential Guidelines and Market Conduct Guidelines, among others.

According to him, there is need for directors to improve their understanding of the requirements of AML/CFT particularly, the recently introduced requirements regarding proliferation financing in the AML/CFT/CPF regulations 2022.

“Also, inadequate risk profiling methodologies and practices, absence of policies to protect Chief Compliance Officers and Chief Risk Officers from intimidation and victimisation.

” Inadequate board compliance policies resulting in companies breaching extant laws and regulations with no consequential action by the board.

“Inadequate focus of boards on risks inherent in the core or significant activities insurance companies such as underwriting, reinsurance, claims, investment and information technology, among others.

“Under-trading as the ratio of capital to premium of most companies are below standard threshold.”

According to the commissioner, these issues require urgent attention of the boards by way of adequate policies to ensure proper guidance in order to ensure sustainability of insurance institutions.

Thomas noted that companies did  not just die, people killed companies; as most of the issues that led to the collapse of companies resulted from governance challenges.

He said that NAICOM recently had to penalise some companies that had utilised unlicensed intermediaries in blatant breach of the Insurance Act 2003.

The commissioner stated that in recognition of the increasingly complex business environment, the commission had resolved to facilitate innovation and sustainability of the industry.

Thomas hinted that NAICOM had heightened its supervision and now focused on resolving broader policy challenges such as sustainability, climate risk and digitalisation, among others.

He said this would be done through regulatory policy initiatives that could facilitate the offer of essential range and variety of products and services that supported the Sustainable Developmental Goals (SDGs).

In a presentation, Dr Lucy Newman, CEO, Africa Private Sector Summit suggested that the board of insurance institutions should focus on efficiency, diversify revenue streams and invest in innovation.

Newman charged the insurance companies board to also engage with stakeholders, embrace sustainability and corporate culture, among other options to sustain their businesses.

Dr Elias Omondi, Principal Innovation for Resilience, FSD Africa, stated that there was need for sound insurance supervision to protect policyholders and insurance companies from going broke and paying fair claims.

Omondi charged managers and directors of insurance firms to adhere to processes of checks and balances, in line with corporate governance and Risk Based Supervision (RBS).

Dr Nosike Agoke, Member, Society for Corporate Governance Nigeria, advised that a third party independent body should be instituted to do the evaluation of the board of companies.

Agoke charged the board of directors to be more responsible in the discharge of their duties by effectively scrutinising agenda items brought before it for the first time before approving.

“It is unfortunate that the engagement the board has with its owners and stakeholders is minimal and tends to be reactive and defensive,” he said.

In her closing remarks, Mrs Yetunde Ilori, Chairman, CIFM thanked NAICOM for its support to organise an insightful conference for the directors and lauded the presenters for being exceptional in their deliveries.

Ilori also commended Mr Edwin Igbiti, President,  Chartered Insurance Institute of Nigeria (CIIN) for allowing the college to enjoy a level of independence and micro manage itself.

The News Agency of Nigeria (NAN) reports that no fewer than 150 board of directors of insurance companies and broking firms in the country attended the conference. 

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