The National Insurance Commission (NAICOM) has introduced new regulatory guidelines that limit the role of standalone Insurtech firms in handling special risk insurance products in Nigeria. Effective August 1, 2025, these firms are barred from underwriting high-risk areas such as oil and gas, marine and aviation insurance, retirement life annuities, and government-related insurance for Ministries, Departments, and Agencies (MDAs). The regulation seeks to impose stricter oversight on the use of advanced technologies like artificial intelligence and blockchain within critical sectors of the insurance market.
The new rules are part of NAICOM’s broader operational guidelines for Insurtechs, aimed at formalizing their activities and aligning them with the traditional insurance regulatory framework. Insurtech, or “insurance technology,” represents firms leveraging emerging technologies such as big data analytics, machine learning, and blockchain to transform insurance operations. Under the updated rules, NAICOM will grant licenses at its discretion and will impose operational conditions aligned with existing laws and standards.
To qualify, prospective Insurtech operators must meet detailed criteria involving risk management, actuarial compliance, outsourcing practices, and investment behavior. A structured dispute resolution mechanism is also included, where disagreements between Insurtechs and insurers must go through arbitration before being escalated to the Commission. Additionally, consumers with unresolved complaints can approach NAICOM directly. All existing operators classified under Insurtech must comply with these new rules within 30 days of implementation.
According to NAICOM, the guidelines are designed not just for regulation but to encourage innovation while ensuring consumer protection. The commission emphasized improving service delivery, building trust in digital insurance solutions, and providing greater clarity to reduce operational ambiguity for new entrants. It also seeks to foster the development of new insurance products that meet the evolving needs of Nigerians through regulated digital transformation.
The guidelines aim to support both Nigeria’s growing digital economy and its fintech ecosystem. Key objectives include promoting responsible innovation, defining product features unique to Insurtech, and facilitating a pathway for eligible firms to evolve into fully licensed entities. By doing so, NAICOM hopes to strike a balance between encouraging technological advancement in insurance and maintaining market stability, particularly in areas involving significant financial or national risk.
Source: Vanguard