Joy Agwunobi
Nigerian insurance stakeholders have raised concerns over the massive outflow of capital from the country as multinational corporations continue to procure health insurance for their employees from foreign providers.
The revelation has reignited debate about the preparedness of Nigeria’s insurance industry to absorb such risks and the implications for economic development.
Ekerete Gam-Ikon, the deputy commissioner for insurance (finance and administration), brought the issue to fore at the Insurance Meets Tech 4.0 Conference in Lagos, where he disclosed that an estimated $2 billion leaves Nigeria annually through payments for offshore health insurance.
“You’ve got a lot of multinationals who are giving their employees health insurance, right? We then discovered that in a year about $2 billion goes into that from Nigeria. They are doing the insurance with international providers. That’s how much spending goes out of Nigeria for health insurance,” Gam-Ikon said.
Business A.M gathered that the practice persists despite provisions in the Nigerian Insurance Industry Reform Act, which mandates that health insurance is part of domestic insurance or reinsurance business, requiring full utilisation of local capacity before being ceded abroad. The law further stipulates that foreign insurers must obtain NAICOM’s approval before transacting Nigeria-related business, with penalties equivalent to the total premium for violators.
The gap between regulation and reality highlights the challenges facing Nigeria’s insurance ecosystem. While NAICOM insists that foreign providers cannot freely transact in the domestic health market, multinationals often cite reliability, global coverage, and alignment with international employee benefit policies as reasons for choosing offshore insurers.
Analysts say this creates a two-tiered system in which multinational employees enjoy dollar-backed health cover from global insurers, while local employees largely rely on Health Maintenance Organisations (HMOs) under the National Health Insurance Authority (NHIA) or pay out-of-pocket for medical care.
Gam-Ikon acknowledged the dominance of traditional insurers in health coverage but asserted that stronger enforcement and collaboration with stakeholders could stem the capital flight. “What the Act has provided for is to have those entities pay a percentage of that to the Nigerian government,” he noted.
For industry leaders, the revelation underscores the untapped potential of health insurance within the domestic market.
Yetunde Ilori, president of the Chartered Insurance Institute of Nigeria (CIIN), argued that insurers must rethink their approach and leverage new capital requirements to expand into health coverage. “Sometimes you want to look at yourself and ask, ‘Am I a one-stop shop? Am I just protecting property and lives? Why not health?’” she said.
Ilori pointed out that many HMOs, though regulated under the NHIA, are subsidiaries of insurance companies, creating a pathway for insurers to scale into health insurance directly. She acknowledged that moral hazards and weak systems discouraged insurers in the past, but argued that advancements in technology, claims management, and risk profiling now offer a chance for insurers to build viable health products.
“With the evolution of technology and so many other things that have now come to be in place, I think it’s an area that insurance companies will want to take a close look at,” Ilori said.
The conversation at the conference also broadened to other areas where insurance penetration remains low. Gam-Ikon disclosed that NAICOM has begun exploring the idea of insurance cover for voters, noting that while the Independent National Electoral Commission (INEC) provides insurance for its staff and equipment during elections, the millions of Nigerians who cast their votes remain unprotected.
“INEC ensured all their staff members, including ad hoc staff, have insurance. It is only voters who go out without insurance,” he said, signalling that NAICOM is open to innovative partnerships that could expand access to underserved groups and weave insurance more deeply into civic and social life.
Per Lagerström, a former McKinsey partner and the CEO of Yellowspot, challenged Nigerian insurers to rethink their models, emphasising the human element in innovation. “Insurance is not built on products alone; it is built on behaviour. If we do not understand how people earn, live, and dream, we cannot design solutions they will embrace. Technology gives us the tools, but human insight gives us the answers.”
Odion Aleobua, the convener of the IMT Conference and the managing director/CEO of Modion Communications, called on insurance innovators to build distribution that meets people where they are: online, on mobile, at work, and in communities, while conforming to evolving lifestyles. He urged regulators to adopt rules that protect consumers without stifling industry innovation.
Similarly, Tunde Mimiko, managing director, SanlamAllianz Life Insurance, stressed the need for the industry to build systems that move beyond legacy bottlenecks, strengthen compliance, and foster greater trust with policyholders.
He emphasised that such developments are crucial for safeguarding customers and positioning insurance as a key driver of financial security and sustainable growth in Nigeria.
Currently, insurance penetration in Nigeria remains below 2 percent of GDP, one of the lowest rates in Africa. Experts argue that broadening coverage to areas like health, electoral participation, and other social activities could help integrate insurance into everyday life for Nigerians.
