On August 5, 2025, Nigerian President Bola Ahmed Tinubu signed into law the Nigerian Insurance Reform Act (NIIRA 2025), a significant overhaul of the country’s insurance sector. This new legislation repeals several existing laws, including the 2003 Insurance Act.

The bill, which was passed by the Senate in December 2024 and by the House of Representatives in March 2025, introduces a comprehensive regulatory framework for all insurance and reinsurance companies operating within Nigeria. Its primary goals are to strengthen the financial stability of insurance companies and to boost the sector’s contribution to the national economy.

Among the key reforms are higher minimum capital requirements for insurance firms, ensuring their financial strength; mandatory coverage for specific policies, such as those for motor vehicles and public buildings, to improve consumer protection; and the digitalization of insurance services, allowing customers easier access, including through mobile phones.

The law also introduces penalties for delays in claim payments, aiming to encourage faster settlements. It establishes guarantee funds to protect policyholders in case of company insolvency and expands Nigeria’s participation in regional initiatives like the ECOWAS Brown Card, which provides cross-border insurance coverage in West Africa.

The National Insurance Commission (NAICOM) will be responsible for overseeing the implementation of these reforms. NAICOM emphasized that the new framework would make the insurance sector more competitive, both regionally and internationally, while also attracting more investment. “This new legislation represents a major milestone in the country’s efforts to revitalize the insurance industry, over two decades after the enactment of the Insurance Act of 2003,” the commission stated.

Despite the reforms, Nigeria’s insurance sector remains underdeveloped compared to other leading African economies. In 2024, insurance companies in Nigeria recorded a total revenue of 1.562 trillion nairas (approximately $1 billion), as reported by Kunle Ahmed, president of the Nigerian Insurers Association (NIA), at the group’s 54th annual general meeting on June 26, 2025. This represented a 56% increase from 2023.

Of this, non-life premiums amounted to 1.092 trillion nairas (around $705.5 million), while life insurance premiums totaled 470 billion nairas (about $303.7 million). Total claims paid by insurers came to 622 billion nairas (roughly $401.8 million).

In 2023, Nigeria accounted for just 2.1% of Africa’s total insurance premiums, according to the African Insurance Organization’s 2024 report. In comparison, South Africa, Morocco, Egypt, and Kenya together accounted for 84.8% of the continent’s total premiums.

By tightening regulations and modernizing the insurance industry, Nigeria aims to increase the sector’s contribution to its GDP and reduce the gap between its insurance market and those of Africa’s leaders.

Source

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