By Favour Pius
Nigeria’s finance and insurance sector grew by 14.54 per cent in 2025, its fastest growth in recent years, driven by recapitalization reforms, stronger balance sheets, and renewed regulatory oversight that enhanced industry capacity, restored confidence, and reinforced its supporting economic stability.
This was revealed in the latest Gross Domestic Product (GDP) figures by the National Bureau of Statistics (NBS) showed that the sector’s contribution to real GDP rose to 2.97 per cent in 2025, up from 2.69 per cent recorded in the previous year, reflecting sustained expansion in both financial institutions and insurance services.
In the fourth quarter of 2025, the sector grew by 8.30 per cent year-on-year in real-terms, while its share of real GDP increased to 2.56 per cent, compared with 2.46 per in the corresponding period of 2024.
Financial institutions remained the dominant driver, accounting for 90.43 per of the sector’s output, while the insurance subsector contributed 9.57 per cent, although insurance recorded faster growth in nominal terms.
Nominal growth in the sector reached 26.58 per cent year in year in the fourth quarter of 2025, with insurance posting a stronger growth rate of 30.83 per cent compared with 26.15 per cent recorded by financial institutions. Overall nominal growth stood at 38.51 per cent in 2025, significantly higher than 22.82 per cent in 2024.
Industry stakeholders said the improved performance reflects the positive impact of recapitalization reforms, stronger balance sheets, and renewed efforts to reposition insurance as a critical pillar of financial stability and economic protection.
Speaking on the development, Managing Director, Mutual Benefits Assurance, Olufemi Asenuga, said growth trajectory demonstrates increasing confidence in the insurance sector and validates ongoing regulatory reforms aimed at strengthening operators’ financial capacity.
“The improved growth in the insurance segment is a reflection of stronger capital positions, improved claims settlement culture, and deliberate efforts by regulators and operators to rebuild public trust. Recapitalization is already enhancing the industry’s ability to absorb risks and meet obligations promptly,” he said.
Similarly, Chairman of the Nigerian Insurers Association (NIA), Kunle Almed, noted that the sector’s expansion signals a gradual shift in public perception and gowing recognition of insurance as an essential financial protection tool.
“This growth underscores the impact of regulatory reforms, especially the emphasis on risk-based capital and stronger insurance. As insurers become better capitalized, their capacity to underwrite larger risks improves, which will ultimately deepen insurance penetration and support economic growth,” he said.
Ahmed added that improved capitalization would enable insurers to participate more actively in critical sectors such as infrastructure, oil and as, agriculture, and housing thereby contributing more meaningfully to national development.
Also speaking, Director-General (NIA) Mrs. Bola Odukale, said the sector’s performance reflects sustained efforts to strengthen operational efficiency, improve customer experience, and enhance claims settlement.
“The industry is undergoing a significant transformation driven by recapitalization, digital innovation, and stronger regulatory oversight. These measures are helping to improve financial resilience, protect policyholders, and restore confidence in insurance,” she said.
Analysts noted that the insurance sector’s faster nominal growth relative to other financial segments highlights its untapped potential, particularly in a country where insurance penetration remains below one per cent of GDP.
They added that ongoing reforms by the National Insurance Commission (NAICOM), including enforcement of compulsory insurance and implementation of the Insurance Reform Act, are expected to further accelerate growth, strengthen solvency, and improved the industry’s contribution to economic stability.
The broader financial services sector continues to play a critical role in Nigeria’s economic expansion, supporting credit creation, mobilization long-term savings, and providing risk protection for businesses and households.
Stakeholders expressed optimism that sustained recapitalization, improved regulation, and growing awareness would position the insurance industry for stronger growth, deeper penetration, and greater contribution to Nigeria’s economic resilience in the coming years.
