By David Akinmola
Despite recording one of its stronger growth streks in recent years, insurance industry continues to deliver limited impact on the nation’s Gross Domestic Product (DGP), underscoring a persistent disconnect between expansion and real economic contribution, and raising fresh concerns among regulators and operators over the effectiveness of ongoing reforms.
Latest figures from the National Bureau of Statistics (NBC) show that the financial services sector, comprising banking and insurance, contributed N6.58 trillion to GDP in 2025, representing a 15 per cent increase from N5.74 trillion in 2024.
However,, the data reveal a persistent structural imbalance, with insurance lagging significantly behind banking in real contribution.
While the banking sector accounted for N5.87 trillion of the total, the insurance industry contributed N710.58 billion, despite recording a higher growth rate of 16.04 per cent compared to banks’ 14.36 per cent within the same period.
A breakdown of quarterly performance reflects steady expansion across the year, with contributions of N1.78 trillion in the first quarter, N1.65 trillion in the second, N1.51 trillion in the third, and N1.64 trillion in the fourth quarter. Notably, insurance recorded a standout growth of 21.37 per cent in Q4, emerging as the fastest-growing segment within the financial services space.
Yet, in spite of this momentum, the sector accounted for just 9.57 per cent of the financial services contribution in real terms in Q4 2025, compared to banking’s dominant 90.43 per cent, reinforcing its limited role in Nigeria’s economic architecture.
Industry stakeholders say the figures present a paradox of strong growth without commensurate impact, driven largely by low penetration, weak enforcement of compulsory insurance, and lingering trust deficits among consumers.
Commenting on the development in a paper delivered at a forum with journalists in Lagos, the Commissioner for Insurance, Olusegun Omosehin, said the current trajectory reflects early gains from reforms but underscores the urgency of bigger structural changes.
“With the Insurance Industry Reform Act now in force, we have a unique opportunity to reposition the sector by strengthening governance, enhancing prudential standards, and expanding access to insurance across all segments of the economy,” he said.
Operators, however, insist that while the growth numbers are encouraging, the industry must urgently scale its reach to match Nigeria’s economic size and population.
Director-General of the Nigerian Insurers Association (NIA), Bola Odukale, said the focus must shift from growth metrics to real economic contribution.
“The growth trajectory is positive and reflects ongoing reforms, but the real challenge is scale. We must translate this into higher penetration and stronger GDP contribution through innovation, enforcement, and rebuilding public trust,” she said.
Similarly, President of the Nigeria Council of Registered Insurance Brokers (NCRIB), Ekeoma Ezeibe, described the trend as evidence that reforms are beginning to yield results, albeit gradually.
“While our contribution is still below expectations, the key point is that the needle is moving. Regulatory reforms, stronger capital requirements, and improved claims frameworks are laying a solid foundation for long-term growth,” she said.
Ezeibe added that brokers are intensifying grassroots engagement and sub-national partnerships to deepen insurance penetration, particularly among retail customers and small and medium-scale enterprises.
“Insurance must evolve in line with the economy. Digital distribution, product innovation, and partnerships, especially with fintechs, will be critical in expanding access and driving inclusion, “she said.
“As companies strengthen their capital base and governance structure, confidence is gradually improving. This repositioning will ultimately translate into stronger performance and higher contribution to the economy, she added.
A financial analyst, Johnson Chukwu, in one of his presentations at an industry event in Lagos, maintains that Nigeria’s insurance sector remains significantly underdeveloped compared to peer African markets, where contributions to DGP are markedly higher.
For him, the gap reflects deep-rooted structural challenges. “The sector is growing, but from a very low base. Penetration remains weak, and until insurance becomes embedded in everyday economic activity, its GDP contribution will remain limited,” he said.
Beyond structural challenges, stakeholders identified low awareness, weak enforcement of compulsory insurance, and persistent concerns over claims settlement as key barriers to growth.
To address these challenges, operators are ramping up investments in micro insurance, digital channels, and retail-focused products, while regulators continue to tighten compliance and push reforms aimed at building a more resilient and inclusive market.
As the industry sustains its growth momentum, stakeholders agree that the next phase must focus on converting performance gains into tangible economic value.
For now, the sector stands at a critical inflection point buoyed by reforms and rising growth, yet under pressure to translate its potential into meaningful contribution to Nigeria’s GDP.
