Operators in Nigeria’s insurance sector remain optimistic about overcoming current challenges and achieving over N2 trillion in premium income by the close of the 2025 business year.
Chairman of the Nigerian Insurers Association (NIA), Mr. Kunle Ahmed, expressed this confidence during an exclusive interview with THISDAY. The NIA is the umbrella body representing all insurance underwriting firms in the country.
Ahmed noted that although the sector faces significant hurdles—such as rising operational costs and a growing shortage of critical skills—there are strong signs of continued growth. He pointed to the performance of several insurance firms in the first quarter of 2025 as evidence of this momentum.
In 2024, the industry generated N1.17 trillion in premium income, marking a 61% increase from the N1.003 trillion recorded in 2023. That milestone followed a long-term goal the industry had set in 2009, when it aimed to grow from N164 billion to a trillion-naira market—a target it finally achieved 14 years later, despite numerous setbacks.
Ahmed said that recent unaudited Q1 results of publicly listed insurers indicate that some companies saw revenue growth of over 40%. He attributed this growth to several factors, including relative stability in the exchange rate, greater creativity among underwriters, and stricter enforcement of compulsory insurance policies—especially third-party motor insurance.
“The growth is even more impressive considering that the impact of currency devaluation has been much lower this year,” he said. “Market dynamics are changing, and enforcement of mandatory policies is helping to drive the numbers up.”
However, he acknowledged that the industry is also experiencing a shift in customer behavior. Many policyholders are opting for short-term coverage instead of annual plans, largely due to affordability issues. Additionally, some policies remain unrenewed, reflecting broader financial pressures.
Despite these issues, Ahmed expressed optimism for the remainder of the year, especially given the impact of a new enforcement initiative by the Nigeria Police Force. Beginning February 1, 2025, the police began strict enforcement of third-party motor insurance, leading to a surge in policy purchases.
“This surge in demand has significantly boosted premium income and is expected to continue as enforcement strengthens through 2025 and beyond,” Ahmed said.
He cautioned, however, that the increased uptake also means a higher volume of claims and potential liabilities. Insurers will need to upgrade their claims processing systems and improve customer service to meet growing demands and ensure policyholder satisfaction.
Ahmed also emphasized the role of the Nigeria Insurance Industry Database (NIID) in combating fraud. With increased police checks and use of the NIID system, fake or invalid insurance certificates are becoming riskier to use, he noted.
