The National Insurance Commission (NAICOM) has defended its minimum capital requirement for insurtech firms, insisting that the regulation is essential for financial soundness and long-term sustainability of the sector.
Speaking at the annual seminar for insurance journalists in Abeokuta, Ogun State, NAICOM’s Deputy Commissioner, Technical, Dr. Usman Jankara, explained that the framework offers insurtechs two operating models: partnership with traditional insurers or stand-alone licensing.
For stand-alone operations, insurtech firms are required to maintain a minimum capital of N1.5 billion per category for general business or N1 billion per category for life business, or higher as determined by the Commission. By contrast, partnerships with insurers only require N10 million in capital alongside a professional indemnity cover of at least N100 million.
“If you choose to partner, all you need is N10 million to operate. But a stand-alone insurtech is essentially a mini-insurance company and must have capital,” Jankara explained.
He stressed that the capital rules were designed not to stifle innovation but to protect policyholders and preserve confidence in the insurtech ecosystem. “We must balance innovation with prudential soundness. If insurtechs fail to meet obligations, public confidence will collapse and set the industry back 20 years,” he warned.
The Commission maintained that while insurtech remains a critical driver of innovation in the financial services space, trust and stability remain the bedrock of Nigeria’s insurance industry.
