Nigeria’s insurance market hits N1.2 trillion

Desk report: Nigeria’s insurance market recorded gross written premiums of N1.213 trillion in the second quarter of 2025, marking a 49.3% year-on-year increase and a 57.8% rise compared to the previous quarter. Full-year 2025 estimates are approaching N1.9-2 trillion, with continued expansion projected into 2026, supported by reforms under the Nigerian Insurance Industry Reform Act (NIIRA) 2025. Total assets reached N4.4 trillion by mid-2025, demonstrating the sector’s growing depth and resilience.

Life insurance products in the country include term, endowment and whole life plans designed to provide death benefits and long-term savings, alongside group life and credit life policies for employee protection and loan guarantees. Pension-linked plans offer retirement savings, while critical illness coverage provides financial protection against major health events. These offerings serve both individual and corporate clients, ensuring financial security and retirement planning solutions.

Non-life insurance encompasses a wide range of products, from motor insurance with mandatory third-party liability and comprehensive accident coverage to property insurance protecting buildings and contents against fire, storms, floods and collapse. Specialised sectors such as oil and gas, marine, aviation and builders’ liability form an important part of the market, alongside professional indemnity, occupiers’ liability, surety bonds, travel, personal accident and emerging micro-insurance or parametric covers.

Mandatory insurance requirements under NIIRA 2025 include motor third-party coverage with medical expense limits for third parties, group life insurance for employees, builders’ and occupiers’ liability, coverage for government assets and employees, petroleum and gas stations, healthcare professional indemnity, aviation and marine cargo. Public buildings are now required to be insured against collapse, fire, earthquakes, storms, and floods. The Act emphasises utmost good faith, full disclosure of material facts before policy issuance and strict timelines requiring policies to be delivered within five working days of premium payment. Non-disclosure or misrepresentation affects payouts only if fraudulent or fundamental.

Claims predominantly arise from motor accidents due to poor infrastructure and high traffic density, flooding and storm damage, oil and gas incidents, fire outbreaks, health treatments under voluntary plans and construction or public building collapses. Industry-wide claims paid in 2024 totaled N622 billion, reflecting growing capacity. Denials usually occur due to non-disclosure, late notifications, policy exclusions, incomplete documentation, or breaches of material terms. Settlements from motor and oil/gas claims often have positive economic effects, while general accident claims occasionally face scrutiny for fraud.

Premiums are assessed based on risk, with regulatory oversight on compulsory lines. Motor third-party tariffs have been revised upwards, while property and fire insurance premiums depend on asset value and exposure to perils, particularly in flood-prone areas. High-value sectors such as oil, gas and marine are priced according to their risk profile, and life and health premiums vary by age and sum assured. Discounts are offered through no-claims bonuses and bundled products, though inflation, naira volatility and reinsurance costs put upward pressure on rates. Claim values range from minor motor repairs or small thefts under N100,000 to major oil and gas, flood, or fire events reaching billions of naira.

Regulated by the National Insurance Commission (NAICOM) under NIIRA 2025, the market has raised minimum capital to N15 billion for non-life, N10 billion for life and N35 billion for reinsurance, alongside risk-based capital requirements. Challenges remain, including low penetration relative to GDP, claims fraud, delayed settlements, currency pressures and protection gaps. However, opportunities continue to arise from compulsory insurance enforcement, digital micro-products, bancassurance and market deepening initiatives. The sector shows resilience and potential for sustained double-digit premium growth in 2026.