By David Akinmola
Industry learders in Nigeria’s insurance sector have warned that the industry’s ability to deepen penetration and compete with regional markets will remain constrained unless operators accelerate efficiency reforms, broaden retail reach and embrace technology-driven distribution.
Speaking at the 25th Adetunji Ogunkanmi Memorial Lecture in Lagos, themed,”Beyond Insurance: Building Resilience, Health, and Legacy,” stakeholders argued that the future of the market lies in expanding coverage beyond traditional corporate accounts to millions of underserved households and small businesses.
Nigeria’s insurance penetration measured as premium volume relative to GDP remains below 1 per cent, one of the lowest in sub-Saharan Africa, despite a population of over 200 million and growing middle class. Ghana is estimated at about 2 per cent, Kenya at 2.3 per cent, while South Africa sits above 13 per cent.
Operators say this gap reflects structural barriers, weak enforcement of compulsory insurance, and poor adoption of digital channels that can reach mass-market consumers.
Managing Director/Chief Executive of the Nigeria Liability Insurance Pool, Mrs. Adeyinka Adekoya, said the sector’s historic reliance on a narrow base of corporate clients has constrained growth and exposed insurers to economic cycles.
She noted that the absence of strong retail engine continues to limit premium expansion and resilience across the industry.
“Resilience is the root of everything we are discussing here,” said. “But the big missing link today is retail penetration. Most insurers still focus on corporate, yet the future of this industry and the real protection gap lie with ordinary Nigerians who remain uninsured.”
Adekoya stressed that product design must shift from genric offerings to solutions tailored to everyday needs micro-insurance, health, agriculture, asset protection, and embedded insurance which have proven in other African markets to accelerate adoption at scale.
She argued that technology remains the most realistic lever for reaching dispersed consumers. “Without technology, reaching the nooks and corners of Nigeria will be very difficult for us,” she said. “Digitalising our operations and offering multiple platforms through which customers can access insurance products are basic steps we must take.”
While many insurers now offer online purchase channels, noted that use of digital tools remains largely superficial, with weak integration into distribution, claims settlement, and customer onboarding.
Adekoya urged the industry to draw lessons from fintechs, whose penetration into underserved communities demonstrates what is possible with aggressive digital-first models.
She also highlighted opportunities created by the new Nigerian insurance Act (NIIRA), which replaces the 2003 law and strengthens enforcement of compulsory insurance including motor third-party, builders’ liability, and ground life.
However, she noted that compliance alone connot drive sustainable penetration. “Consumers must see value beyond compulsory; insurance has to become attractive enough for people to buy willingly,” she added.
Delivering the lecture, Managing Director/Chief Executive Officer, Cornerstone Insurance Plc, Stephen Alango, said the evolving risk landscape ranging from climate volatility to economic instability underscores the urgency of a resilience system capable of absorbing shocks.
He linked resilience to three pillars; health, financial protection, and legacy-building, noting that insurance remains critical to safeguarding households and ensuring continuity. “There are a lot of risks working against us from climate change to political instability,” he said. “The more we build a mindset to stay resilient, the better for us.”
On penetration, Alangbo said ongoing reforms across government and regulatory agencies are already reshaping the environment. “From the Presidency to NAICOM to the Nigerian Insurers Association, everything is working to make insurance improve from compulsory insurances to the enforcement stance of the new management of NAICOM and the introduction of NIIRA,” he said.
He projected that stronger compliance and retail expansion could reposition the industry to compete with mature markets. “I will not be surprised if, like South Africa in the near future,”he added.
Industry analysts say Nigeria’s insurance sector currently valued at roughtly N1.3 trillion in yearly premiums could triple in size within decade if operators successfully unlock the retail segment, deepen digital adoption, and enforce compulsory lines consistently. However, these gains hinge on building trust, simplifying products, and ensuring faster claims payments, which remain central concerns among consumers.
