The Chief Executive Officer of the National Insurance Commission (NAICOM), Olusegun Omosehin, has reiterated the importance of insurance as a financial safety net, emphasizing that it remains a more reliable and cost-effective alternative to medical crowdfunding and other informal risk management methods.
Despite Nigeria’s large population exceeding 200 million, insurance penetration in the country remains at a low 1%, a statistic the NAICOM boss described as concerning. Speaking on Channels Television’s News Night, Omosehin highlighted the immense potential of the insurance industry while addressing key challenges hindering its growth.
The Nigerian Insurance Landscape: Growth Amidst Challenges
Omosehin pointed out that the insurance sector is experiencing double-digit growth, with promising areas such as microinsurance, Takaful insurance, and cyber insurance gaining traction. He emphasized the high demand for affordable insurance products tailored to individuals and small businesses, as well as the increasing need for cyber risk coverage due to the expansion of digital banking and financial services.
“The insurance landscape currently has great potential but with some teething challenges… There’s potential for growth in Takaful insurance, considering Nigeria’s significant Muslim population looking for non-interest insurance products.”
Insurance Penetration in Nigeria: The Numbers Tell a Story
Currently, insurance penetration in Nigeria stands at just 1% of the total population, far below the global average of 7%. The regulator’s goal is to raise this figure to 5% within the next decade through aggressive reforms and public awareness campaigns.
Many Nigerians still rely on social networks and crowdfunding to manage financial emergencies instead of purchasing insurance policies. Omosehin noted that while this cultural practice fosters communal support, it is financially inefficient compared to structured insurance coverage.
“Instead of contributing N50,000 multiple times a year for emergencies, Nigerians can pay a lower premium annually into an insurance pool, ensuring better financial security.”
Increasing Awareness and Trust in Insurance
A major hurdle facing the industry is a lack of awareness about the benefits of insurance. NAICOM is actively engaging in public education, enlightenment campaigns, and regulatory reforms to build trust in the sector.
“We are embarking on mass education, public awareness, and enlightenment campaigns. Nigerians need to understand how insurance can protect their finances, especially in an era of high inflation.”
While large corporations and multinationals—especially in oil & gas, aviation, and manufacturing—already benefit from insurance, individual adoption remains low. The commission aims to bridge this gap through policies that enhance consumer confidence and streamline claim settlements.
Ongoing Reforms and Consumer Protection
NAICOM is committed to strengthening regulatory oversight and protecting consumers. The commission has established a complaints bureau to handle disputes between policyholders and insurers, ensuring fair resolution within 24 hours.
Additionally, the 2024 Insurance Reform Bill, currently under legislative review, is expected to reshape the sector by:
- Increasing the minimum capital requirement for insurance companies.
- Enhancing consumer protection mechanisms.
- Empowering regulators to take decisive action against defaulters.
“Our mantra is simple: Find a reason to pay a claim. We have zero tolerance for the non-settlement of genuine claims, and insurers know this.”
With these reforms, NAICOM aims to foster a robust, transparent, and consumer-friendly insurance industry, ensuring that Nigerians can access affordable and reliable financial protection.
