Victor EzejaAs the Nigerian government pushes to drive increased adoption of insurance in the country as part of financial sector transformation, there are concerns that citizens have poor knowledge of insurance, making it difficult for them to embrace it.
President Bola Tinubu on Tuesday signed into law the Nigerian Insurance Industry Reform Bill, 2025.
Join our WhatsApp ChannelJust like the new tax laws, the new insurance law, now known as the Nigerian Insurance Industry Reform Act (NIIRA), 2025, repeals and consolidates multiple obsolete insurance laws into a single, modern legal framework.
In a statement released on Tuesday by Tinubu’s spokesperson, Bayo Onanuga, the presidency described the new insurance law as a “landmark legislation to strengthen Nigeria’s financial sector and accelerate the nation’s march toward a $1 trillion economy.”
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Some of the key reforms introduced by the Act include a stringent capital requirements to ensure the financial soundness of operators; enforcement of compulsory insurance policies to enhance consumer protection; digitisation of the insurance market to improve access and efficiency; zero tolerance for delays in claims settlement; creation of dedicated policyholder protection funds, especially in cases of insolvency; and expanded participation in regional insurance schemes, including the ECOWAS Brown Card System.
The National Insurance Commission (NAICOM) is empowered to implement the provisions of the NIIRA 2025 to unlock the industry’s full potential and significantly improve insurance penetration across the country.
“The reform introduced by the new law is expected to catalyse new investments, boost consumer confidence, and position Nigeria as a leading insurance hub in Africa,” Onanuga further stated.
Why This Reform Matters
Insurance penetration in Nigeria remains alarmingly low, with various reports indicating that only between 0.5 per cent to 13.4 per cent of Nigerians have any form of insurance coverage. This poor adoption stems from multiple interrelated factors, including lack of awareness, cultural and religious beliefs, economic constraints, and distrust in insurance providers.
Commenting on this new insurance law, a public policy analyst and member of the Nigerian Guild of Editors, Igho Akeregha, said it is a positive development, acknowledging that there is low awareness of insurance in Nigeria.
“The insurance literacy level in Nigeria is very low,” Akeregha stated during a newspaper review on Channels Television on Wednesday morning.
“In Nigeria, the insurance culture and awareness are very low,” he added.
Akeregha cited the issue of poor earnings, which makes many low-income earners unable to meet basic needs, let alone putting money in insurance, and also distrust as other factors responsible for low adoption.
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According to him, many do not know that the insurance sector has more liquidity than the banking sector, because most time, they don’t pay premiums to beneficiaries.
He said many people embrace insurance in advanced countries because they have better wages, and insurance companies are more responsible.
He called on the government and insurance companies to step up advocacy to sensitise Nigerians on the benefits of all the categories of insurance in the country, as part of efforts to implement the new insurance law.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
