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By Henry Uche [email protected]
Despite regulatory reforms and increased stakeholder collaborations witnessed in 2025, only 1% of Nigerians have embraced insurance.
This highlights persistent hurdles in awareness, affordability and accessibility.
Nonetheless, 2025 has been a significant year for Nigeria’s insurance sector. Legislative reforms, digital innovation, the rise of Takaful insurance and robust premium growth indicate a sector poised for sustainable expansion. While operational pressures and low market penetration remain challenges, strategic interventions by NAICOM, coupled with public-private collaborations, suggest a path toward deeper financial inclusion, higher consumer confidence, and a more resilient insurance ecosystem.
The most notable development this year was the long-awaited passage of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law by President Bola Tinubu on Thursday, July 31. Replacing the outdated 2003 Insurance Act, NIIRA consolidates existing insurance laws into a modern, comprehensive framework aimed at strengthening transparency, competitiveness, and financial stability within the sector.
Among the most impactful provisions of the Act is the revision of minimum capital requirements for insurance firms. Under the new law, non-life insurance companies are required to maintain N15 billion, life insurance firms N10 billion, composite firms N25 billion, and reinsurance companies N35 billion. Stakeholders in insurance and actuarial science expect that this will bolster solvency, enhance operational stability, and ultimately protect policyholders. While the benefits of NIIRA are numerous, its potential to increase investor confidence and attract both domestic and foreign investments stands out as transformative.
Beyond legislative reforms, the National Insurance Commission (NAICOM) continued to emphasise the growth of Takaful insurance, a Sharia-compliant product, as a strategic avenue to expand coverage among Muslim communities. In a recent engagement, NAICOM’s Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, hosted the Takaful Advisory Council (TAC) in Abuja. The meeting facilitated an exchange of ideas on ways to institutionalize Takaful products and leverage Nigeria’s demographic potential, given its population of over 200 million.
Omosehin noted, “Nigeria’s population presents a significant opportunity for the growth of Takaful insurance, with potential that transcends religious boundaries.”
He added that the sector’s future growth will increasingly rely on financial inclusion-focused segments such as microinsurance, Takaful insurance, and digital aggregators, underscoring the need for institutionalized engagements with TAC on an annual basis.
Responding, Professor Abdulrazzaq Abdulmajeed Alaro, TAC Chairman, recommended retreats, workshops, and capacity-building initiatives across the industry to enhance stakeholder competence.
Digital innovation also gained traction in 2025. NAICOM issued operational guidelines for Insurtech firms, formalizing the regulatory framework for digital insurance providers and promoting competition and innovation. At the Insurance Meets Tech (IMT 4.0) Conference, industry players discussed youth inclusion, digital adoption, and innovative strategies as critical components of broader sector reforms. These initiatives aim to modernize operations, enhance efficiency, and make insurance products more accessible to a wider audience.
The sector’s financial performance in 2025 presented a mixture of optimism and caution. The recapitalization drive, one of the most ambitious in the industry’s history, saw approximately 57 insurers striving to raise nearly N1 trillion to meet new capital thresholds. This push has placed consolidation pressures on smaller firms, potentially leading to mergers, exits, or regulatory actions.
Despite these pressures, the industry recorded remarkable growth in premiums. In Q1 2025, gross written premiums (GWP) reached N769.2 billion, a 63.4% increase from N470.7 billion in Q1 2024—the highest first-quarter premium ever recorded. By Q2, GWP surged further to N1.21 trillion, reflecting 49.3% year-on-year growth and a 57.8% increase quarter-on-quarter. NEM Insurance led premium generation with N75.41 billion, highlighting both resilience and competitive strength.
While official figures for Q3 2025 are pending, data from the top 10 reporting insurance companies (those listed on the Nigerian Exchange) showed combined revenues of N220.9 billion, with AXA Mansard Insurance Plc leading at N39.37 billion. Non-reporting and smaller insurers likely contributed additional revenue, signaling sustained sector expansion despite operational pressures.
Operational challenges, however, have persisted. Some firms reported rising claims costs and other pressures that affected profit margins, reflecting the delicate balance between growth, sustainability, and risk management.
Consumer confidence and market penetration remained central to sector discourse in 2025, aligning with NAICOM’s theme: “Building Consumer Trust and Expanding Insurance Penetration.” Industry stakeholders emphasized transparent claims settlement, prompt payment, and public education as critical to overcoming skepticism and fostering trust among Nigerians. Additionally, enforcement of compulsory policies—such as motor insurance—remained a priority, with awareness campaigns actively promoted to drive uptake.
Outlook and opportunities for Nigeria’s insurance sector in 2026
The Nigerian insurance industry in 2025 has emerged as a sector in transformation, buoyed by regulatory reforms strategic collaborations, technological innovation and a renewed focus on consumer trust. Analysts and industry writers alike have posited that the sweeping reforms introduced this year are poised to position Nigeria more competitively within the region, potentially attracting foreign investment and facilitating participation in international schemes such as the ECOWAS Brown Card System.
The reforms have also prompted underwriters to explore digital distribution channels and Insurtech platforms as a means of reducing barriers to entry and reaching underserved markets. As one industry expert observed, “Economic headwinds and fluctuating demand could continue to challenge premium growth in certain segments,” highlighting that despite optimism, the industry must navigate a complex economic landscape.
Among the leading performers in the sector are the top insurance companies listed on the Nigerian Exchange Group (NGX). Based on the most recent market data from 2025, including market capitalization, premiums received, and asset size, these include AIICO Insurance Plc, AXA Mansard Insurance Plc, Custodian and Allied Insurance Plc, NEM Insurance Plc, Cornerstone Insurance Plc, Mutual Benefits Assurance Plc, Sovereign Trust Insurance Plc, Lasaco Assurance Plc, Linkage Assurance Plc, and Consolidated Hallmark Holdings Plc. Other notable players include Universal Insurance Company Plc, International Energy Insurance Plc, Guinea Insurance Plc, Prestige Assurance Plc, Regency Alliance Insurance Plc, and SUNU Assurances Nigeria Plc. These firms have demonstrated resilience, robust capital structures, and the ability to innovate in an evolving market.
The NAICOM helmsman, Commissioner Olusegun Ayo Omosehin, undertook a radical tour across multiple Ministries, Departments, and Agencies (MDAs), as well as international bodies, to secure buy-in for initiatives aimed at catapulting the insurance industry to new heights. In January, the Commission forged a strategic alliance with the Federal Fire Service, integrating Fire Insurance Policy compliance into the assessment of public buildings and buildings under construction. This initiative aimed to boost regulatory compliance and enhance insurance penetration across the country.
Later in January, the Commissioner received the Malaysian High Commissioner to Nigeria, Mr. Aiyub Omar, for a courtesy visit focused on leveraging Malaysia’s extensive experience with Takaful insurance. The Commission explored best practices and international models that have driven sustained growth in Takaful over the past three decades. Omosehin emphasized that adopting proven strategies from comparable markets would create a conducive environment for insurance growth in Nigeria, benefiting both policyholders and industry stakeholders.
The Commissioner also visited the Inspector General of Police, Mr. Kayode Egbetokun, to discuss the enforcement of compulsory insurance policies, particularly Third-Party Motor Insurance, while applauding the Police Insurance Company for its contributions to the sector. Further, NAICOM established a Joint Technical Committee with the Nigerian Civil Aviation Authority (NCAA) to address aviation-related insurance issues, recognizing the critical role of insurance in mitigating risks in this high-stakes sector.
NAICOM also hosted a World Bank delegation, with discussions centering on perception, penetration, cyber insurance, actuarial capacity, financial inclusion, and automation. The engagement underscored Nigeria’s ambition to modernize its insurance landscape while enhancing transparency and efficiency.
In collaboration with the Federal Road Safety Corps (FRSC), NAICOM strengthened enforcement of motor third-party compulsory insurance, aiming to promote safer roads and protect citizens. Similarly, an MoU with the Nigerian Electricity Management Services Agency (NEMSA) sought to enhance electrical safety and insurance compliance, establishing a cooperative framework to safeguard lives and property from electrical hazards.
The regulator also prioritized public education and financial literacy. In February, NAICOM and the United Nations Development Programme (UNDP) conducted the “Insurance Literacy and Consumer Protection Campaign” at Wuse Market, Abuja. The initiative sought to increase awareness about insurance as a tool for financial resilience and inclusive growth. Key partners included the Nigerian Insurers Association (NIA) and the National Council of Registered Insurance Brokers (NCRIB).
In May, NAICOM facilitated a study tour with the Ghana Cargo Technical Committee, bringing together stakeholders from Nigeria’s insurance and marine industries, including the NIA, NCRIB, Nigeria Customs Service, Nigerian Port Authority (NPA), Nigerian Shippers Council, and the Nigerian Maritime Administration and Safety Agency (NIMASA). The engagement aimed to foster knowledge-sharing, strengthen regional collaboration, and explore best practices for maritime insurance and risk management.
Domestically, the Commission conducted a capacity-building workshop on Group Life Assurance Policy with the Office of the Head of the Civil Service of the Federation (OHCSF). This event brought together stakeholders from various government MDAs to enhance understanding and ensure effective implementation of life assurance policies.
On the international front, NAICOM welcomed a high-powered delegation from the Central Bank of Gambia, led by Mr. Nyang Medeleine Gomez, for strategic knowledge exchange. The visit focused on Nigeria’s Risk-Based Supervision, prudential frameworks, and inclusive insurance practices, highlighting the country’s growing reputation as a regional leader in insurance regulation.
Not resting on institutional achievements alone, Commissioner Omosehin spearheaded a nationwide campaign, “Insurance for All: Securing Nigeria’s Future,” aimed at raising public awareness about the role of insurance in national development. This week-long initiative marked a first in Nigeria’s insurance sector, taking the message directly to the streets and emphasizing the importance of financial protection for all citizens.
Further strengthening industry compliance, NAICOM inaugurated the 2025 Recapitalisation Committee, chaired by Mrs. Oluwatoyin Charles, Director of Supervision. The Committee’s mandate is to oversee the implementation of the recapitalization program, ensuring adherence to the new minimum capital requirements prescribed by NIIRA 2025. Following this, all insurance and reinsurance companies received notification to commence recapitalization in line with the new standards.
Recognizing the interconnectedness of financial markets, Commissioner Omosehin paid a courtesy visit to the Director-General of the Securities and Exchange Commission (SEC), Mr. Emomotimi Agama, in August. Both agencies expressed optimism about the positive impact of insurance on Nigeria’s broader economy.
Enforcement remained a priority. NAICOM, in collaboration with the Nigeria Police, conducted a crackdown on fake insurance policy vendors, particularly targeting perpetrators of counterfeit third-party motor insurance policies in Abuja’s Mabuchi area. The operation formed part of a strategic initiative to protect consumers and reinforce public trust in the industry.
The Commission also engaged the Registrar General of the Corporate Affairs Commission (CAC), Barr. Hussaini Magaji, to ensure collaborative support for the 12-month recapitalization timeline, emphasizing seamless implementation of NIIRA 2025.
Similarly, partnerships with the Nigerian Economic Summit Group (NESG) were forged to drive economic growth through insurance sector reforms, with both agencies committing to synergistic collaboration.
In a forward-looking approach, NAICOM partnered with the FinTech Association of Nigeria to accelerate the development of Insurtech solutions. Discussions focused on digital transformation strategies, with the FinTech Association pledging support to modernize insurance delivery. Omosehin reaffirmed NAICOM’s dedication to building public trust through transparent digital solutions and safeguarding policyholders’ interests, signaling a commitment to technological innovation as a driver of growth.
At the tail end of the year, the Sustainable Development Goals (SDGs) Synergy Initiative engaged NAICOM to deepen insurance awareness among Nigerian youths and support SDG implementation. Alongside the NCRIB, the Commission pledged to enhance compliance, consumer protection, and public awareness across the nation.
Nigerians interviewed across the country expressed optimism about the year ahead, buoyed by the regulator’s initiatives and operators’ promises. While analysts and industry watchers are poised to evaluate Commissioner Omosehin’s performance when he eventually leaves NAICOM, stakeholders are generally hopeful. The sector’s trajectory signals an era of enhanced regulation, digital transformation, financial inclusion, and consumer-centric growth, setting the stage for a stronger, more resilient insurance ecosystem in Nigeria.
