By Emmanuel Adebowale
Despite a growing population and increasing awareness of financial planning, insurance products continue to struggle in Nigeria’s market. But while current sales numbers may seem discouraging, the story behind them reveals opportunities for growth, reform, and innovation in an industry poised for a turnaround.
According to the National Insurance Commission (NAICOM), Nigeria’s insurance penetration remains under 1% of GDP, one of the lowest in Africa. But this isn’t due to a lack of need—rather, it stems from years of mistrust, limited awareness, and cultural nuances that have long defined consumer behavior in the sector.
The Trust Deficit
One of the biggest barriers to insurance adoption in Nigeria is trust. Many Nigerians have experienced or heard stories of delayed or denied claims, leading to a deep-seated skepticism about insurance companies’ reliability. “It’s not that people don’t see the value,” says Bola Adeyemi, an industry analyst. “It’s that they don’t believe insurers will be there when they need them most.”
Efforts are being made to address this. NAICOM has strengthened regulations, increasing transparency and improving claim settlement processes. New digital platforms are also offering real-time tracking of claims, which is beginning to restore confidence among younger consumers.
Cultural Beliefs and Perception
For many Nigerians, especially in rural areas, insurance is still seen as an unnecessary or foreign concept. Traditional beliefs and religious sentiments can make people wary of products that appear to anticipate misfortune. However, there’s growing evidence that younger, tech-savvy Nigerians are more open to new financial tools, including microinsurance and health plans bundled with mobile services.
Affordability and Accessibility
Another challenge is affordability. Many standard insurance packages are priced beyond what the average Nigerian can comfortably pay. But fintech startups are now disrupting that model by offering bite-sized premiums as low as ₦200 per week. These innovations are making insurance more inclusive.
A Positive Outlook
While the current numbers may seem bleak, industry stakeholders are optimistic. Recent government policies, increased foreign investments, and public-private partnerships are paving the way for expansion. For instance, mobile insurance platforms like Axa Mansard’s “MyAXA” and AIICO’s WhatsApp-based services are simplifying access and education, helping to bring insurance to the fingertips of millions.
“The future of insurance in Nigeria is not bleak—it’s just misunderstood,” says Olufunke Ojo, CEO of a Lagos-based insurtech firm. “We’re moving from a low-awareness era into a digital-first economy. With the right messaging and transparency, we’ll see insurance evolve from a ‘nice-to-have’ into a must-have.”
Conclusion:
While insurance products may not be selling as expected in Nigeria today, the seeds of transformation are being planted. Trust is being rebuilt, innovations are lowering entry barriers, and a new generation is open to rethinking risk. The industry may be slow to catch on—but when it does, it will be worth the wait.
