US President Donald Trump speaks as he signs an executive order targeting ticket scalping in the Oval Office of the White House in Washington, DC, on March 31, 2025. (Photo by SAUL LOEB / AFP)
As the United States imposes a 15% tariff on Nigerian exports, effective August 2025, industry stakeholders are calling on Nigeria’s insurance sector to enhance its risk management strategies and evolve its product offerings to support exporters and safeguard industry growth.
The tariff hike follows a July 31 executive order signed by U.S. President Donald Trump, amending America’s reciprocal tariff system. Nigeria is now one of approximately 40 countries subject to increased trade penalties, with the U.S. citing “unbalanced” trade relationships as justification.
Speaking on the development, insurance expert and public affairs analyst, Mr. Ade Adesokan, said the move comes at a critical moment for Nigeria’s insurance industry, which has shown strong resilience and growth in recent years.
“The sector must now adapt strategically to sustain its momentum while supporting Nigerian exporters during this period of uncertainty,” Adesokan said.
The latest tariff marks a further escalation from the 14% rate imposed in April 2025, which was suspended for 90 days to allow for negotiations and later extended by one month. Under the revised system, countries with a U.S. trade deficit now face a default 15% tariff, while those with a trade surplus are charged a lower 10% rate.
The situation could deteriorate further, as President Trump has warned of an additional 10% tariff on countries aligning with BRICS policies. Following Nigeria’s admission as the ninth BRICS partner in January 2025, total tariffs on Nigerian exports to the U.S. could potentially rise to 25%.
Insurance Sector Resilience
Despite economic headwinds, Nigeria’s insurance industry recorded robust performance in 2024:
- Gross premium income reached ₦1.56 trillion, up 56% from ₦1.00 trillion in 2023.
- Non-life insurance led the market with ₦1.1 trillion, while life business contributed ₦470 billion.
- Industry assets grew to ₦3.9 trillion, a 46.1% increase from ₦2.67 trillion in 2023.
- Market capitalisation rose by 41%, hitting ₦1.2 trillion.
- Claims payments totaled ₦622 billion, with non-life accounting for ₦437 billion and life insurance ₦185 billion.
Key Insurance Lines Affected
Adesokan identified several insurance segments likely to feel immediate effects from the new tariffs:
- Marine Insurance: Providers will need to reprice coverage as exporters may reduce shipping frequency or consolidate shipments to absorb additional costs.
- Trade Credit Insurance: With increased payment risks in U.S. trade, demand for protection against buyer defaults may surge, though claims may also rise due to contract cancellations or delayed payments.
- Property & Casualty Insurance: Export-driven manufacturers may scale back operations or defer expansion, prompting a reassessment of asset valuations and coverage.
- Business Interruption Insurance: Companies heavily reliant on U.S. exports may experience revenue losses or supply chain disruptions, potentially leading to a rise in interruption-related claims.
Adesokan noted that the tariff changes could accelerate Nigeria’s export diversification efforts, which would require insurers to build expertise in new international markets.
“As exporters seek alternative markets beyond the U.S., insurers must enhance their capacity to assess risks in new trade corridors. This diversification can strengthen underwriting portfolios but demands fresh investment in market intelligence and risk evaluation,” he said.
Regulatory Oversight and Industry Support
He urged key regulatory and professional bodies—including the National Insurance Commission (NAICOM), the Nigerian Insurers Association (NIA), and the Nigerian Council of Registered Insurance Brokers (NCRIB)—to play proactive roles in navigating the evolving trade landscape.
“Regulatory flexibility may be necessary to enable innovation and product development, while maintaining consumer protection and financial stability,” Adesokan concluded.
As global trade dynamics shift, Nigeria’s insurance sector must brace for new challenges and opportunities, redefining its role in supporting economic resilience and sustainable export growth.
