Nigeria’s insurance industry is losing billions of naira in potential premiums from more than 40 million small and medium-sized enterprises (SMEs), largely due to weak awareness and limited education about the benefits of insurance.
This was disclosed by Emomotimi Agama, Director-General of the Securities and Exchange Commission (SEC), at an Insurers Committee meeting in Lagos.
Agama noted that insurers have yet to harness opportunities in the capital market and key sectors such as agriculture, smallholder farming, and manufacturing. With more than 60 per cent of Nigeria’s adult workforce—about 54 million people—operating in the informal sector, the lack of awareness leaves the majority outside the insurance net.
Low penetration, structural barriers
Experts cite poor customer education, delayed claims settlement, and inadequate distribution channels as major barriers to insurance uptake. They stress that building trust and delivering timely value to clients are critical for boosting penetration.
Tokunbo Talabi, Secretary to the Ogun State Government, underscored the need to address integrity challenges that have eroded public confidence in the industry. He praised the customer retention fund provision in the forthcoming National Insurance Industry Reform (NIIRA) 2025.
Olusegun Omosehin, Commissioner for Insurance and Chief Executive of the National Insurance Commission (NAICOM), urged operators to embrace innovation, data-driven insights, and strategic partnerships. He called for the development of a resilient and inclusive industry that can strengthen economic stability, mobilise savings, and reduce the government’s financial burden.
Comparing global benchmarks
Despite notable growth in recent years, Nigeria’s insurance penetration remains below 1 per cent—far behind South Africa (11.54 per cent), Namibia (7.41 per cent), Morocco (4.10 per cent), Kenya (2.25 per cent), and the global average of 6.8 per cent.
Olatunde Amolegbe, Managing Director of Arthur Stevens Asset Management Limited, said winning back public trust is the first step toward capturing the informal sector. He urged insurers to adopt technology-driven, simplified enrolment systems, particularly for small businesses and self-employed workers.
He also encouraged operators to leverage the awareness created by NIIRA 2025 to promote financial literacy among younger Nigerians and highlight the role of insurance in savings and long-term planning.
Industry growth but limited reach
Between 2020 and 2024, the sector achieved a 56 per cent rise in gross written premiums, reaching ₦1.562 trillion—₦1.1 trillion from non-life insurance and ₦470 billion from life policies. Industry assets grew by 46.1 per cent to ₦3.9 trillion, while market capitalisation climbed to ₦1.2 trillion. Net claims paid stood at ₦622 billion, driven by fire, oil and gas, and group life products.
Analysts, however, warn that strong financial growth means little without broader participation. Nkechi Naeche-Esezobor, an insurance analyst, highlighted the need for expanded coverage, tighter regulatory oversight, and the integration of technology to boost transparency and efficiency.
“The necessity of strengthening insurance mechanisms to support both individual well-being and macroeconomic resilience cannot be overstated,” she said.
