As Nigeria marks its 64th Independence anniversary, it’s an opportune time to reflect on the growth and performance of the nation’s insurance sector, a key pillar in its economic framework. The industry, often overshadowed by banking and oil, has played a crucial role in economic stability, risk management, and job creation. With reforms, regulations, and technological advancements, the sector has grown in significance over the decades.
Industry experts highlight that Nigeria’s insurance landscape has evolved from its formative stages in the 1960s to a dynamic, modernized industry today. They emphasize how the establishment of the National Insurance Commission (NAICOM) in 1997 provided a regulatory backbone that has steered the industry toward international best practices. The consolidation phase, reforms on capital adequacy, and the drive for financial inclusion have also boosted the sector’s credibility.
Mr. Olusegun Ayo Omosehin, Commissioner for Insurance at NAICOM, noted, “The Nigerian insurance sector has made remarkable progress in terms of regulatory policies and compliance, but challenges still exist in penetration, public trust, and enforcement of compulsory insurances.”
One of the standout achievements of the past decade is the steady increase in Gross Written Premiums (GWP), which has seen the sector grow to over N500 billion in 2023. The rise of digital insurance platforms has contributed to this growth, allowing for easier access to insurance services. Experts like Mr. Ekerete Ola Gam-Ikon, an insurance analyst and NAICOM executive member, attribute this to the increased adoption of technology, which has allowed more Nigerians, particularly in rural areas, to access microinsurance products.
Another critical milestone is the gradual shift toward risk-based supervision, which has enabled companies to operate more efficiently while protecting policyholders’ interests. The recapitalization exercise initiated by NAICOM has further strengthened the industry, ensuring that only financially sound companies operate in the market.
However, despite these strides, experts point out that insurance penetration in Nigeria remains below 1%, significantly lagging behind other emerging markets. Mrs. Ebelechukwu Nwachukwu, former Royal Exchange General Insurance Company Ltd and the Managing Director of NSIA Insurance, asserts, “There is still much work to be done in educating the populace about the importance of insurance. The industry must continue to innovate and develop products that meet the specific needs of Nigerians.”
Looking ahead, stakeholders believe that the sector is poised for further growth, especially with increasing investments in technology, regulatory enforcement, and partnerships. The recent collaboration between NAICOM and state governments to enforce compulsory insurance policies for public buildings and assets is expected to boost both insurance penetration and revenue.
As Nigeria continues its journey toward economic diversification, the insurance sector will play a pivotal role in ensuring sustainable growth. Experts agree that the future of Nigeria’s insurance industry lies in innovation, trust-building, and a robust regulatory framework. With these, the sector is set to contribute even more significantly to the country’s prosperity in the years to come.
At 64, Nigeria’s insurance sector may still be in its developmental phase, but its progress thus far showcases its potential to be a critical driver of the nation’s economy.
