The National Insurance Commission (NAICOM) has issued new operational guidelines that restrict digital insurance firms from participating in high-risk and complex sectors without prior approval. These include oil and gas, marine, aviation, and any cryptocurrency-related transactions.
The guidelines, released on NAICOM’s website on Wednesday and effective from August 1, 2025, mark a significant regulatory step intended to ensure risk control, consumer protection, and compliance within the country’s insurance technology space.
Insurtech—a fusion of insurance and technology—has gained momentum in Nigeria due to high mobile phone penetration and underserved insurance needs. However, the Commission is now drawing a clear line to ensure that innovation does not outpace regulation.
The new framework prohibits insurtech companies from engaging in the following without NAICOM’s prior consent:
Oil and gas insurance
Marine and aviation insurance
Retirement life annuity products
Insurance of government assets and liabilities
Acceptance or payment of premiums and claims using cryptocurrency
Reliance solely on AI to deny claims without human intervention
Data privacy breaches or sharing of personal data without explicit consent
Dark pattern interfaces that manipulate users into unintended purchases
Cross-border digital insurance sales without regulatory approval
Also, the guidelines ban insurtechs from using traditional physical marketing tactics employed by conventional insurance operators.
NAICOM has introduced tiered capital requirements based on the nature of insurtech operations. For standalone insurtechs:
₦1.5 million per category for general or non-life insurance
₦1 billion per category for life insurance
Or any other amount determined periodically by the Commission
For those partnering with established insurance companies, the minimum capital threshold is ₦10 million, alongside a professional indemnity cover of at least ₦100 million.
All insurtech firms must also file audited annual financial statements no later than the first quarter of the following year.
Companies currently operating under any insurtech arrangement have 30 days from August 1 to align their practices with the new rules.
Speaking at the 2025 Nigerian Actuarial Society Conference, AIICO Insurance CEO, Babatunde Fajemirokun, highlighted the transformative potential of insurtech in Nigeria. “It represents a fundamental reimagining of how insurance is designed and delivered, especially in markets with low insurance uptake but high mobile penetration,” he said.
Fajemirokun pointed to AIICO’s digital platform, Flexure, which has sold over 3 million policies, as proof of growing digital adoption and insurtech’s potential to expand coverage across demographics.
These regulations are aimed at de-risking the insurtech space, ensuring transparency, protecting consumers from data breaches and exploitative digital tactics, and maintaining Nigeria’s financial integrity.
By banning unregulated crypto activities, NAICOM is aligning with global efforts to curb the misuse of digital currencies in financial services. Additionally, preventing total reliance on AI in claims decisions reinforces the Commission’s commitment to fairness and human accountability in insurance dealings.
NAICOM’s guidelines are a welcome step in professionalizing Nigeria’s insurtech sector while preserving its potential for growth. By setting clear boundaries and introducing mandatory compliance measures, the Commission is establishing a level playing field where innovation thrives within a safe regulatory environment.
Industry players, particularly startups and foreign investors eyeing Nigeria’s insurtech space, must now adapt swiftly or risk being excluded from one of Africa’s most promising insurance markets.