Nigeria’s insurance industry has significant room for growth, with low market penetration offering opportunities for insurers to expand coverage, develop innovative products and support key sectors of the economy, an investment expert, Ayodele Akinwunmi, has said.
Akinwunmi, Chief Economist at United Capital Plc, made the observation while delivering a keynote address on Post-Recapitalisation and Market Dynamics in the Insurance and Pension Sectors at the annual national conference of the Nigerian Association of Insurance and Pension Editors (NAIPE).
He said insurance penetration in Nigeria stood at between 0.4 per cent and 0.5 per cent of gross domestic product (GDP), highlighting the substantial potential for growth in the sector.
According to him, insurers that succeed over the next decade will be those that channel capital into sound underwriting practices, inclusive insurance products, digital infrastructure and productive long-term investments rather than focusing solely on the size of their balance sheets.
Akinwunmi said the industry’s recapitalisation exercise could create a pathway towards stronger insurance companies, deeper markets and a more resilient Nigerian economy.
He explained that higher capital levels and risk-based solvency requirements would strengthen insurers’ balance sheets, improve their ability to manage risks and enhance their capacity to withstand economic shocks.
The economist added that better-capitalised insurers would be better positioned to underwrite larger and more complex risks within Nigeria.
This, he said, could enable local operators to retain a greater share of domestic risks, reduce reliance on foreign reinsurers and provide more support for sectors such as energy, infrastructure, agriculture, small and medium-sized enterprises (SMEs) and retail businesses.
Akinwunmi also identified digital transformation as a key driver of growth in the post-recapitalisation insurance market.
He said increased investment in digital platforms, broader distribution channels and data-driven pricing and underwriting could help insurers reach more customers and improve risk assessment.
The sector, he added, had opportunities to develop innovative products, including microinsurance, retail insurance, parametric insurance, Takaful and other specialised offerings tailored to different customer segments.
He further highlighted the potential for automation and straight-through claims processing to improve service delivery, enhance customer experience and increase operational efficiency.
The expert’s remarks underscored the need for insurers to translate stronger capital positions into wider insurance access, better products and more efficient services if the industry is to realise its growth potential.
