Nigeria’s insurance industry strengthened its financial position in 2025, recording its highest-ever premium income while growing total assets to almost N5 trillion, a performance that signals improving capacity to underwrite bigger risks and support economic activity despite a challenging operating environment.
Fresh industry figures show Gross Premium Income (GPI) exceeded N2.3 trillion during the year, while total assets rose by 7.4 per cent to N4.8 trillion from N4.5 trillion in 2024, underscoring the sector’s expanding balance sheet and improving financial resilience.
The performance was disclosed by Kunle Ahmed, immediate past chairman of the Nigerian Insurers Association (NIA), during the Association’s 55th Annual General Meeting (AGM), where he described 2025 as a milestone year for Nigeria’s insurance market.
According to Ahmed, the industry’s record premium income reflects stronger underwriting capacity, deeper market penetration and increasing confidence in insurance products among businesses and individuals.
The non-life insurance business remained the industry’s largest contributor, generating N1.57 trillion in premiums. Ahmed attributed the performance largely to higher retention of oil and gas risks within the domestic market and stronger enforcement of compulsory motor and marine insurance.
Life insurance companies contributed N727.4 billion to the industry’s total premium income, supported by growing awareness of long-term financial planning and sustained demand for Retiree Life Annuity products.
“The record premium income reflected the industry’s expanding market reach and stronger underwriting capacity,” Ahmed said.
The stronger premium performance was matched by an improvement in the industry’s claims-paying ability, with insurers settling N724.7 billion in gross claims during the year, equivalent to about 31.5 per cent of gross written premiums.
According to Ahmed, non-life insurers achieved a claims settlement ratio of 75.5 per cent, while life insurance companies recorded a settlement rate of 65.5 per cent, reflecting improvements in operational efficiency and claims administration.
He said the industry’s ability to honour claims more efficiently, particularly within specialised portfolios such as oil and gas, has helped reinforce public confidence in insurance despite prevailing capital constraints.
“The improved claims experience, particularly in specialised portfolios such as oil and gas, has boosted market confidence despite prevailing capital constraints,” he said.
Beyond higher premiums, the industry’s growing asset base points to stronger financial buffers across insurance companies.
Ahmed disclosed that total industry assets climbed to N4.8 trillion in 2025, with non-life insurers accounting for N2.6 trillion and life insurance companies holding N2.2 trillion.
He attributed the sector’s improved financial position to stronger regulatory enforcement, wider collaboration with law enforcement agencies and state governments in implementing compulsory insurance, and the growing adoption of InsurTech solutions that have expanded distribution while reducing operating costs.
According to him, technology has enabled insurers to serve more customers, particularly in previously underserved markets, while improving operational efficiency across the industry.
Ahmed also noted that insurers have significantly improved their capacity to retain complex and high-value risks locally through initiatives such as the Energy and Allied Insurance Pool of Nigeria, reducing reliance on foreign markets and helping retain more insurance premiums within the country.
He added that operators strengthened their capital positions ahead of the implementation of the Nigerian Insurance Industry Reform Act 2025, while underwriting discipline and data-driven risk management practices also improved across the industry.
Despite the record performance, Ahmed acknowledged that Nigeria’s insurance penetration remains below both African and global averages, indicating significant room for future growth.
To close the gap, he said the Association would intensify enforcement of compulsory insurance, expand affordable microinsurance products, promote a stronger “Claims First” culture to build public trust and leverage telecommunications platforms and bancassurance partnerships to reach more Nigerians.
According to him, these initiatives are expected to increase insurance’s contribution to Nigeria’s Gross Domestic Product while strengthening the industry’s role in supporting businesses and economic development through effective risk management.
Ahmed described the Nigerian Insurance Industry Reform Act 2025 as the most significant regulatory overhaul of the sector in more than two decades.
He said the legislation replaces the Insurance Act 2003 with a modern legal framework that strengthens solvency requirements, improves corporate governance, enhances transparency and provides greater protection for policyholders.
The new law also introduces Risk-Based Supervision and requires insurers to maintain capital that reflects the risks they underwrite, a move expected to accelerate recapitalisation, mergers, acquisitions and broader industry restructuring.
While the transition may present short-term operational challenges, Ahmed said the reforms ultimately provide an opportunity to build a stronger, more resilient and internationally competitive insurance industry.
He reaffirmed the NIA’s commitment to supporting the National Insurance Commission (NAICOM) in implementing the reforms through advocacy, technical support and capacity building.
Reviewing the Association’s activities over the past year, Ahmed highlighted the deployment of the upgraded Nigerian Insurance Industry Database (NIID 2.0), which now provides real-time verification across a broader range of compulsory insurance policies.
According to him, the enhanced platform is helping reduce fraud, improve data integrity and strengthen collaboration among insurers, regulators, law enforcement agencies and state governments.
He added that the Association’s technical committees also worked closely with regulators to assess the implications of the new insurance law, harmonise underwriting and claims standards and support implementation of the new capital and supervisory framework.
Ahmed further disclosed that the NIA expanded engagement with the National Assembly, the Chartered Insurance Institute of Nigeria (CIIN) and other industry stakeholders to promote reforms aimed at improving insurance penetration and building a more transparent, resilient and digitally enabled insurance market.
