Joy Agwunobi
The Nigerian insurance sector continues to struggle with poor market penetration, as new data shows that fewer than two million Nigerians maintain any form of insurance coverage each year.
This revelation reignited concerns among industry experts and stakeholders who assert that the challenges facing the industry extend far beyond economic hardship. According to them, systemic inefficiencies, widespread financial illiteracy, and misaligned product strategies are at the heart of the problem.
These concerns came to the fore at the recent Investment Summit 1.0, a high-level forum convened under the theme “Investments in Insurance: Opportunities for Financial Growth.” Organised by Investment Info Hub Nigeria Ltd in collaboration with Cornerstone Insurance Plc, the summit brought together stakeholders in insurance and investment sectors to assess how risk protection products can support Nigeria’s broader financial growth agenda.
Tunde Lawuyi, head of strategy and project management at Cornerstone Insurance Plc, cited findings from EFInA (Enhancing Financial Innovation & Access) report, which highlighted the sector’s limited outreach—revealing that fewer than two million Nigerians actively purchase insurance policies annually.
He argued that the low level of insurance adoption is not solely a function of poverty, but also a result of the sector’s failure to adapt its offerings and delivery mechanisms to the realities of most Nigerians.
“Many Nigerians, particularly those in rural communities, have little to no disposable income,” Lawuyi explained. “These are individuals whose livelihoods often depend on subsistence farming and informal trade. Yet, what the industry offers them are products like car and home insurance—services that are not only irrelevant to their needs but completely out of context for their way of life.”
He stressed the urgent need for the industry to transition toward more inclusive models like microinsurance, which is tailored for low-income earners and informal workers. While Nigeria has adopted regulatory frameworks to encourage the development of such products, Lawuyi noted that practical execution remains elusive.
“Microinsurance policies can be sold for as little as ₦500 to ₦1,000 annually, but the challenge lies in making the business model sustainable. How do we incentivise agents to sell such low-cost products? The only viable path forward is technology—leveraging digital platforms to scale distribution, lower operational costs, and reach underserved communities,”he said.
Also speaking at the summit, Asamau Adams, brand strategist at Investment Info Hub Nigeria Ltd, addressed the widespread mistrust that continues to impede insurance uptake. She noted that misinformation, past financial scams, and a general lack of financial education have created a climate of suspicion around insurance products.
“Insurance penetration is abysmally low because many Nigerians lack the knowledge and confidence to engage with financial tools. Scams like MMM and CBEX have left deep scars, eroding public trust and making it difficult for legitimate financial services to gain traction,”Adams stated
Adams highlighted the importance of education and awareness in rebuilding public trust and expanding insurance coverage. “We need to reframe the conversation,” she said. “Financial empowerment isn’t just for the elite. Anyone, regardless of income level, can benefit from insurance—whether it’s for a mobile phone, farm tools, or health coverage. The problem is that many Nigerians don’t even know such options exist, let alone how affordable they can be.”
She identified trust, education, and access as the critical pillars for improving the adoption of insurance in Nigeria. “Even when people understand the benefits, they often lack the access to enroll in these services. Bridging that gap will require collaboration between insurers, technology platforms, and community-based advocates,” Adams concluded.
Kayode Odetola, head of retail at Cornerstone Insurance, highlighted how poor financial education—especially among younger Nigerians, is contributing to risky behaviors. He warned that without a foundational understanding of investment and risk protection, many fall prey to Ponzi schemes and illegitimate financial products promising fast returns.
In a broader assessment of the national landscape, Shehu Raji, chief operating officer of Investment Hub Nigeria Ltd, listed additional obstacles including inadequate infrastructure, complex regulatory processes, a prevalent get-rich-quick mindset, and worsening security challenges—all of which discourage both investment and insurance uptake.
He stressed that while insurance is a vital pillar of financial resilience, its success depends on public trust, relevant product design, and effective delivery mechanisms tailored to Nigeria’s socio-economic realities.
