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By Henry Uche
For decades, the Nigerian insurance sector has struggled to grow past the meagre one per cent penetration rate, meaning that 99 per cent of over 220 million citizens are outside the coverage net.
But experts are not giving up, because, according to them, the sector brims with tremendous possibilities that should never be ignored.
However, they insist that unlocking the vast potential will require a united front between policyholders, operators and regulators, each playing a decisive role in building trust, widening access and making insurance a strategic driver of national security and prosperity.
From health, life, agriculture to property and insurance products, there appears to be an insufficient level of crusade to get Nigerians’ buy-in.
Insurance experts agree that the pathways to deepening insurance penetration in Nigeria are wide, but convincing those who have little or no understanding of how insurance works remains a daunting task.
Leveraging policyholders’ testimonies to convince skeptical subscribers
Many Nigerians would rather hear directly from those who have benefited from insurance, believing real-life testimonies to be more credible than any marketing campaign. According to industry veterans, dispelling the deep-seated negative perceptions held by millions of Nigerians requires voices from within, people who can share how insurance has positively impacted their lives and businesses.
Olufemi Abbas, an insurance educator and former Head of the Insurance Department at Lagos State University, told Daily Sun that the sector’s longstanding history of mistrust, deceptive practices and complex policy terms has left many Nigerians ignorant and skeptical.
He emphasised that the few who truly understand and appreciate insurance must take deliberate steps to debunk these misconceptions and free skeptics from their entrenched cynicism.
“The only way is through consistent enlightenment, backed by facts, figures, and relatable examples of where insurance works”, Abbas said.
Some experts argue that sharing real-life stories grounded in everyday realities, where insurance products have been tailored to meet specific needs, could create the biggest impact. If more informed Nigerians consciously communicate the tangible benefits of insurance to others, they say, the ripple effect could be transformative.
Shattering retrogressive stereotypes
An interactive session with insurance students from select universities across Nigeria revealed a troubling misconception that continues to hinder insurance penetration; the belief that insurance is a profession reserved solely for ‘professionals’ or the highly educated elite.
For many, the concept appears complex, intimidating and even incompatible with the prevailing religiously saturated environment. This, experts argue, highlights the urgent need to reimagine insurance and break long-standing stereotypes.
One effective way, they suggest, is through real-life testimonies from Nigerians who have personally benefited from insurance.
Industry doyens believe that any sustainable approach to widening insurance coverage must begin with a thorough assessment and baseline analysis. Regulators, operators, and experienced policyholders must collaborate to identify uninsured and underinsured populations, map their locations, understand their unique circumstances and uncover the reasons behind coverage gaps. With this data, stakeholders can better analyze why existing policies, products, and services fail to reach specific groups and design targeted interventions.
The professionals also emphasised the importance of reviewing current policies and regulatory frameworks to uncover barriers to wider coverage. Where gaps exist, policy reforms, ranging from subsidies and tax incentives to mandates, must be introduced to encourage broader participation. A recent survey further highlighted the need to strengthen consumer protection, foster trust through transparent regulations and effective grievance redress systems, deploy technology and use clear, jargon-free contractual language. Ultimately, satisfied policyholders become the most persuasive advocates, spreading the message of insurance across communities and dismantling misconceptions.
Regulators’ push
An Insurance expert, Mr. Samuel Adesokan said for a successful roadmap to widen insurance coverage in Nigeria, attention must be given in making insurance affordable and accessible; building public trust and awareness; and leveraging technology for easier access.
He maintained that the National Insurance Commission (NAICOM) should promote microinsurance products designed for low-income earners, while enforcing existing compulsory insurance laws more effectively and efficiently.
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For instance, ensuring all vehicles on Nigerian roads have minimum third-party cover and expansion of access to the National Health Insurance Scheme.
Adesokan added that education and awareness campaigns are essential to changing the negative perceptions about insurance in the country.
“Many Nigerians view insurance with suspicions due to past experiences with delayed claims or complex processes. Though the testimonials from first hand experienced satisfied policyholders do have a lot of conviction, however, simple, transparent communication about how insurance works and its benefits by the operators, regulator and other stakeholders could help build confidence. Religious and community leaders who know better could also play important roles in these awareness efforts, explaining insurance in culturally relevant ways that resonate with local communities”
He affirmed that technology offers the biggest opportunity to transform Nigeria’s insurance landscape. Mobile money platforms, channels, USSD codes and digital payment systems could also make buying insurance as simple as purchasing mobile data or airtime. “Partnerships between insurance underwriters and telecom providers, banks and these fintech companies could reach millions of previously uninsured populace. By simplifying policy purchase, premium payments and claims processing through digital channels, insurance can become more convenient and trustworthy, ultimately driving widespread adoption across Nigeria” he added.
Also, Mr. Segun Bankole, Deputy General Manager (DGM), Corporate Communications & Investor Relations, at Sovereign Trust Insurance Plc, was of the opinion that if necessary insurance is made compulsory for individuals and all entities with strict implementation mechanisms, it would be easier to widen the insurance roadmap.
He said Europe, America and others have embedded insurance in everything they do and by that very act, insurance is widened.
Bankole, who doubles as the Chairman of Corporate Affairs Managers of the Nigerian Insurance Association (CAMCONIA), stressed that Nigerians must have a culture of insurance that must be backed by law.
“How many government agencies have insurance? How many hospitals have professional medical insurance? The more insurance participation, especially the government, the better for our economy.
“It’s a symbiotic relationship. Insurance is a promise, that promise comes to life when a claim crystalizes. That promise must be made in a form of tangible product that everyone would be able to buy”, he explained.
He added that fees should not be collected from insurance companies for not doing the right thing, without a corresponding act of helping them promote the business.
“So the roadmap to widening insurance coverage in Nigeria depends largely on the government. “You have to lead by example by making sure that all government agencies and properties are insured adequately and all premiums paid. “Imagine the impact if all the buildings, all the commercial buses have either comprehensive or third party motor insurance.
“Practitioners cannot enforce insurance, it’s the government, if that is not done, definitely one would just be going in circles. Enforcement is key, government participation is key, more marketing communication on the part of the businesses, more education and awareness on the part of practitioners is needed, if we must widen insurance coverage” he explained.
For a former Chairman of Nigerian Insurers Association (NIA), Mr. Gus Wiggle, the insurance roadmap in Nigeria is wide already, but noted that widening it further requires a more strategic roadmap that addresses the unique challenges and opportunities in the country. A key step is to increase awareness and understanding of insurance products among Nigerians, particularly uninsured.
This, he said, can be achieved through targeted education and outreach programmes, leveraging both traditional and digital channels. “Operators should focus on developing innovative insurance products that cater to the needs of diverse populations, including low-income earners and small businesses and strengthening the regulatory framework to ensure industry stability and consumer protection is also crucial” he suggested.
Undoubtedly, product innovation is inevitable in a bid to widen insurance in Nigeria. Over time, industry watchers have suggested that insurance companies need to constantly design inclusive products and recalibrate their services. By developing more microinsurance products, community-based plans, more flexible payment models- tailored to different demographics (informal sector, low-income, rural, etc.), the road to penetration becomes wider.
“More profound is technology integration: We use mobile platforms and digital IDs for enrollment, premium collection, and claims processing. This must be encouraged at all costs. Some authorities in this field have sued for bundled services to be integrated into insurance with other services such as credit, healthcare, and agriculture inputs.
In addition, insurance educators have advocated wider distribution and partnership networks with NGOs, CSOs, cooperatives, and telecom operators. Even Public-Private Partnerships (PPP) can be explored to expand outreach and share risk.
Meanwhile, the training and retraining of insurance agents, brokers, and facilitators is ideal to boost insurance adoption and acceptance. A network of trained insurance agents and brokers who understand local contexts is vital in this widening effort. Again, awareness and education go hand in hand with insurance literacy campaigns: with the use of radio, community meetings, and schools to educate people about the benefits and processes.
Sovereign Trust Insurance Plc is one company among others that have carried out the ‘Catch Them Young’ initiative at Igbobi College, Yaba, Lagos, to inculcate and infuse the gospel of insurance into the Deoxyribonucleic Acid (DNA) of young students in Nigeria.
An insurance advocate, Charles Odia, said it was high time operators began to make claims payment loud by publicizing satisfied policyholders to the public using the instrumentality of different social media platforms, for the world to see and believe that insurance indeed pays.
To Odia, mere publishing of figures paid in claims in the newspapers is not sufficient to attract more Nigerians towards insurance. “It’s not enough to publish how much you pay in billions of naira in claims without seeing the policyholders who received this compensation. We need to see them, we need to know who they are. We should stop shielding them from the public. Nigerians need to hear from them. The first-hand testimonials would go a long way to convince more Nigerians to buy into insurance. Seeing, they say, is believing,” he maintained.
But a Corporate Communications Manager of an underwriting firm who pleaded anonymity in an interview said insurance companies have their reasons (reserved) for not showcasing the faces of policyholders whom they paid claims. “We pay claims. Informed Nigerians know; the regulator also knows. We publish it in newspapers and other media houses, including the digital space; it runs in billions. But as to why most of us don’t show the faces of satisfied customers, we have our reasons. Of course, the policyholders can go ahead to talk about it as far and wide as they deem necessary. Ours is to keep our promises in the most seamless way,” he affirmed.
On the regulatory path, the Commissioner for Insurance, Mr. Ayo Omosehin, since assuming office, has been engaging so many government agencies, ministries, and departments in a bid to widen insurance adoption, foster financial inclusion, and protect individuals and assets. While doing this, industry stakeholders have been advised to devise sustainable strategies to widen and deepen insurance for the betterment of the Nigerian economy.
