The recently signed Nigerian Insurance Industry Reform Act (NIIRA) 2025 is expected to usher in sweeping changes that will consolidate the industry, drive innovation, and strengthen institutions capable of delivering reliable coverage nationwide.
Speaking on News Central TV, economist and Awabah founder, Tunji Andrews, underscored the significance of the new law, noting its expanded scope compared to previous frameworks.
“In 2003, there was nothing called fintech. It didn’t exist,” Andrews said. “Now we have regulation for fintech businesses—both those who provide cover and those who distribute. It’s very encompassing.”
Higher Capital Requirements to Strengthen the Industry
One of the most far-reaching provisions of NIIRA 2025 is the increase in capital requirements for insurance companies. The measure mirrors past reforms in the banking and pension sectors that forced mergers, acquisitions, and consolidation, ultimately leaving behind stronger and more efficient institutions.
“What you saw in the pension industry was that those who couldn’t raise capital merged or were bought out,” Andrews explained. “The same will happen here—resulting in bigger, better insurance companies.”
Analysts expect the shake-up to create a leaner, more competitive market, boosting consumer confidence, improving service delivery, and expanding insurance penetration across Nigeria.
Regulation for Fintech and Digital Insurance
The Act also closes a long-standing regulatory gap in the digital insurance space. With the rise of fintech platforms offering insurance services across state lines, concerns had grown over product quality and consumer protection.
The NIIRA 2025 now provides clear regulatory guidelines for both insurers and distributors operating online.
“My office is in Lagos, but I can provide insurance in Abuja,” Andrews noted. “The question has always been: what ensures I deliver exactly what I promise? Now, we finally have regulation.”
By formalizing digital insurance, the Act is expected to expand affordable coverage to underserved populations, unlock new growth opportunities, and strengthen consumer protection.
Key Provisions You Should Know
The NIIRA 2025 introduces several practical reforms for everyday Nigerians:
- Digital motor insurance: Section 96(1)(b) allows motorists to present digital insurance certificates during routine checks or accidents, replacing the mandatory hardcopy format.
- Penalties for unlicensed agents: Section 37(1) prescribes a six-month jail term or a ₦500,000 fine for unlicensed agents operating in Nigeria.
- Licensing for online operators: Section 201 requires all digital insurance providers to obtain a license from the National Insurance Commission (NAICOM).
Driving Nigeria’s Economic Growth
As Nigeria works toward achieving a $1 trillion economy, the NIIRA 2025 is being hailed as a landmark reform capable of transforming the insurance industry into a stronger contributor to financial stability, innovation, and inclusive growth.
