Nigeria is losing an estimated $2bn annually to capital flight as multinationals insure their employees with offshore providers instead of local firms, according to the National Insurance Commission (NAICOM).
The Deputy Commissioner for Insurance (Finance and Administration), Ekerete Gam-Ikon, disclosed the figure during a panel session at the Insurance Meets Tech 4.0 Conference in Lagos. He noted that the Insurance Industry Reform Act mandates companies to first exhaust local capacity before taking health insurance contracts abroad.
“What we discovered is that about $2bn goes out of Nigeria every year for health insurance. These firms are doing it with international providers,” Gam-Ikon said. “The law requires that a percentage of that must be paid to the Nigerian government.”
The Act also stipulates that no foreign health insurance provider can operate in Nigeria without NAICOM’s prior approval, with penalties of at least the full premium involved for violators.
Beyond health cover, Gam-Ikon revealed that the regulator is also exploring insurance for voters. While the Independent National Electoral Commission (INEC) insures its staff and equipment, he noted, voters remain uncovered during elections.
Industry leaders argue that reforms could help redirect some of the lost capital back into the domestic market. President of the Chartered Insurance Institute of Nigeria, Mrs. Yetunde Ilori, said stricter capital requirements might push insurers to invest more in health coverage.
She added that advances in technology now make health insurance more viable for local underwriters. “With the evolution of technology, I think this is an area insurance companies will take a closer look at. Beyond protecting property and lives, insurers should also cover health,” Ilori said.
Analysts warn that unless local insurers deepen capacity and credibility in health coverage, multinationals will continue to rely on foreign providers—sustaining the $2bn annual drain on Nigeria’s financial system.
