By David Akinmola
THE National Insurance Commission (NAICOM) has endorsed the Lagos State Building Insurance Scheme as a blueprint for other states, saying the technology-driven initiative will strengthen enforcement of compulsory insurance while the Nigerian Insurers Association (NIA) said wider adoption could unlock the country’s underdeveloped insurance market and reduce uninsured losses.
The initiative, which integrates digital policy verification, geospatial building intelligence and coordinated enforcement, marks one of the most significant regulatory interventions in Nigeria’s insurance industry since the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, with stakeholders projecting that effective implementation could unlock billions of naira in yearly premiums and significantly reduce uninsured losses from fire, flooding and building collapse.
Launching the scheme in Lagos at the weekend, the Commissioner for Insurance, Olusegun Omosehin, represented by the Deputy Commissioner for Insurance (Finance and Administration), Ekerete Ola Gam-Ikon, said the era of weak enforcement of compulsory insurance laws must come to an end.
According to him, while Nigeria has enacted laws requiring insurance for public buildings and buildings under construction for several years, enforcement has remained weak, creating room for fake insurance certificates, quack operators and widespread non-compliance.
He said the Lagos initiative provides the first practical demonstration of how compulsory insurance can be effectively implemented through collaboration between regulators and sub-national governments.
“What Lagos State has done is to take this national law and give it practical, enforceable life at the level where buildings actually stand. That is precisely the partnership the Act envisaged,” Omosehin said.
He explained that every insurance policy issued under the scheme would be verified to ensure it originates from insurers licensed and supervised by NAICOM, while the Commission would work with the Lagos State Government to eliminate forged insurance certificates and unlicensed operators.
The commissioner also ruled out any exclusive underwriting arrangement, insisting that all insurers licensed by NAICOM must have equal opportunity to participate in the scheme.
“We will not permit monopolies or exclusive cartels. The framework must remain open to every qualified insurer licensed by the Commission. Competition improves innovation, strengthens capacity and ultimately benefits policyholders,” he said.
Omosehin warned insurers that the credibility of the initiative would depend largely on prompt claims settlement, stressing that delayed or unpaid claims could undermine public confidence in compulsory insurance.
“The confidence we build today will be won or lost at the point of claim. A scheme that collects premiums promptly but pays claims slowly will fail, and it will deserve to fail. The Commission will hold operators to fair terms, honest pricing and prompt settlement of legitimate claims,” he said.
The scheme comes at a critical period for the insurance industry as operators race to comply with the recapitalisation requirements under the NIIRA 2025 while regulators intensify efforts to enforce compulsory insurance classes as a strategy for expanding market penetration.
Also speaking the development, the Chairman of the Nigerian Insurers Association (NIA), Mrs. Ebelechukwu Nwachukwu, described the Lagos initiative as a major milestone in protecting lives, property and investments, noting that insurance should be viewed as a preventive economic safeguard rather than a post-disaster intervention.
“Insurance is not an afterthought following disaster; it is an essential part of building safer communities before disaster occurs,” she said.
According to her, effective enforcement of compulsory building insurance would reduce the financial burden of disasters on individuals, businesses and government while promoting greater confidence in the insurance industry.
“Insurance cannot prevent every tragedy, but it can ensure that tragedy does not become permanent hardship. It is not a burden placed upon property owners, but a protection extended to them. It is one of the smartest investments anyone can make in safeguarding lives, assets and the future,” she added.
Nwachukwu urged insurers participating in the scheme to uphold high underwriting standards, maintain professionalism and ensure prompt settlement of genuine claims, adding that the association would continue to collaborate with governments and regulators to improve compliance with compulsory insurance nationwide.
Insurance experts said the Lagos Building Insurance Scheme could become a turning point for the industry, where weak enforcement of compulsory insurance has long constrained growth despite existing legislation.
They noted that compulsory insurance classes, including public buildings, buildings under construction, occupiers’ liability, group life and motor third-party insurance, remain significantly under-enforced, limiting premium generation and exposing millions of Nigerians to avoidable financial losses.
Industry observers, argued that successful implementation of the Lagos model would not only improve consumer protection but also expand insurers’ premium income, strengthen underwriting capacity and increase the industry’s contribution to the economy.
They further observed that the initiative complements the ongoing recapitalisation exercise by creating additional business opportunities for better-capitalised insurers while improving their ability to underwrite large and complex risks.
For stakeholders, the significance of the Lagos scheme extends beyond regulatory compliance. They believe it offers a practical roadmap for tackling one of Nigeria’s biggest insurance challenges, low penetration, by combining technology, effective enforcement and collaboration between government and the private sector.
