Joy Agwunobi 

Insurance stakeholders have called on operators in Nigeria to back the landmark Nigerian Insurance Industry Reform Act (NIIRA) 2025 with disciplined execution, stressing that the credibility of the sector will be judged not by the size of balance sheets but by how many Nigerians and businesses it can protect.

Speaking in a televised interview, Rashidat Adebisi, chief client officer at AXA Mansard Insurance Plc, described the NIIRA Act as a historic opportunity to reposition the sector. 

However, she warned that reforms on paper would amount to little without operational discipline and customer-centred execution.

“Recapitalisation and risk-based capital standards create the right foundation, but capitalisation alone will not improve customer experience nor boost investor confidence. Execution is what will transform this industry,” Adebisi noted.

The NIIRA 2025 raises capital requirements significantly: life insurance operators must now maintain a minimum of ₦10 billion (up from ₦2 billion), general insurers ₦15 billion (up from ₦3 billion), while reinsurers must hold at least ₦35 billion (up from ₦10 billion).

Adebisi explained that these thresholds will likely shrink the number of players in the industry but leave behind more resilient institutions. According to data from NAICOM, about 46 percent of insurers already meet the requirements.

“I anticipate a slightly smaller industry but one that is more stable, resilient, and better able to support clients. Beyond stronger balance sheets, recapitalisation should ensure insurers create real safety nets for corporates, SMEs, government, and individuals,” she said.

She added that consolidation, mergers and acquisitions, and new investment flows could mirror the experience of Nigeria’s banking and pension sectors, where stronger institutions emerged after recapitalisation drives.

Both Adebisi and other industry leaders stressed that NIIRA’s provisions on compulsory insurance enforcement, policyholder protection, and digitisation are as crucial as the capital hike.

“Compulsory insurance is not just about collecting more premiums. It is about consumer protection. We must not leave the government alone to shoulder the burden of unexpected events,” Adebisi emphasised.

She noted that Nigerian insurance penetration remains below one percent despite decades of market potential, partly because of affordability barriers, weak consumer trust, and cultural perceptions such as “God is my insurance.” With NIIRA, she said, the industry has a chance to shift that narrative through stricter enforcement of claims payment, transparent pricing, and value-based conversations with customers.

Digitisation, she argued, is central to that transformation. “The world is digital. The insurance industry must adapt. From valuation of assets to claims transparency, technology is how we can prove value and build trust.”

The Act also aligns with the government’s ambition of positioning insurance as a key pillar of Nigeria’s proposed $1 trillion economy by 2030. Adebisi pointed to the Nigerian Insurance Association’s (NIA) innovation hub as an example of how the sector is already moving in that direction.

“Imagine all of this coming together at the right time—recapitalisation, digitisation, compulsory insurance, policyholder funds. Insurance can then become a very strong pillar of Nigeria’s trillion-dollar economy ambition,” she said.

Also speaking on the NIIRA, Akinjide Orimolade, chief executive at Stanbic IBTC Insurance, described the Act as timely and transformative. He emphasised that its provisions will improve consumer protection, restore confidence, and give insurers the financial muscle to pay claims promptly.

“Why are we in business? It is to pay claims, and not just pay but pay on time. With this new capital base, companies can settle claims as due and that builds trust in the market,” Orimolade said.

He explained that the recapitalisation drive will not only enhance insurers’ balance sheets but also allow them to take on larger risks in critical sectors such as oil and gas, construction, and power—areas previously ceded to foreign insurers.

The new law also mandates insurers to set aside 0.25 percent of gross premium income as policyholders’ funds, a development he said would further strengthen governance, accountability, and customer satisfaction.

Enforcement and inclusion

Orimolade highlighted NIIRA’s empowerment of the regulator, NAICOM, to enforce compulsory insurance policies across motor, building construction, public buildings, and group life schemes for organisations with more than three employees.

He stressed that enforcement, alongside financial inclusion, would expand insurance reach across Nigeria. “It is not just about big players. There is space for microinsurance and takaful to serve low-income segments. With risk-based capital, smaller operators can focus on niche areas while still contributing to overall penetration.”

Technology as a driver

Both experts agreed that digitisation will be a game-changer, not only in onboarding customers but also in claims settlement. Orimolade noted that technology investments—enabled by higher capital—will make products more accessible and affordable, while ensuring transparency in service delivery.

“With robust digital platforms, onboarding becomes seamless, e-KYC can be done easily, and claims can be paid faster. That simplicity will change how Nigerians see insurance,” he said.

Looking ahead, Adebisi predicted a leaner but better-capitalised industry with deeper digital integration, stronger enforcement, and improved customer solutions.

“I expect deeper market penetration, improved consumer trust, and stronger resilience for businesses and individuals. This recapitalisation is not just about money—it is a recipe for trust,” she stated.

Adebisi, however, stressed that financial recapitalisation alone will not transform the industry. She highlighted the importance of awareness and sustained engagement, noting that greater education and industry-wide sensitisation are critical to unlocking the sector’s potential.

Orimolade agreed, adding that the reforms position Nigerian insurers to “collaborate, innovate, and ultimately become credible global players.”