Akinwunmi: Insurance Sub-Sector Holds Nigeria’s Biggest Untapped Growth Potential

By LOVETH-AZODO CHIJIOKE, Lagos

The Chief Economist and Head of Research at United Capital Plc, Mr. Ayodele Akinwunmi, has identified the Nigerian insurance industry as the single largest repository of unexploited economic value within the nation’s financial services architecture, arguing that current structural under-penetration presents a multi-trillion-naira frontier for forward-looking capital.

Delivering a keynote address titled “Post-Recapitalisation and Market Dynamics in the Insurance and Pension Sectors” at the 11th Annual National Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, Akinwunmi observed that the sector’s meager 0.4 to 0.5 per cent contribution to Gross Domestic Product (GDP) one of the lowest globally is not merely an indicator of historical inertia, but an extraordinary growth opportunity.

He cautioned, however, that the coming consolidation wave would fundamentally disrupt legacy operating models, noting that size alone will no longer guarantee market dominance.

“The winning insurers in Nigeria’s next decade will not simply be institutions holding the largest nominal balance sheets, but those who aggressively deploy fresh capital into underwriting excellence, inclusive retail products, digital distribution architecture, and productive long-term assets,” Akinwunmi stated.

Outlining what he characterized as the “post-recapitalisation transmission mechanism,” the investment strategist maintained that an adequately capitalized insurance market is vital to domestic economic resilience and sovereignty.

He explained that higher statutory capital floors paired with a robust Risk-Based Capital (RBC) framework will trigger a domino effect across the real economy: strengthening corporate solvency, insulating underwriters from macro shocks, and curbing capital flight.

According to Akinwunmi, a well-capitalized domestic underwriting fraternity would finally possess the capacity to absorb large-ticket, complex risks in energy, maritime, transport infrastructure, and industrial manufacturing—segments that have historically relied heavily on offshore reinsurance syndicates.

“With deeper balance sheets, Nigerian underwriters can retain a significantly larger share of domestic insurable risks, drastically reduce FX-denominated capital outflows to foreign reinsurers, and actively intermediate capital into priority sectors such as agriculture, infrastructure, and small-and-medium-scale enterprises (SMEs),” he noted.

Beyond big-ticket corporate underwriting, Akinwunmi urged operators to utilize new capital buffers to democratize coverage across Nigeria’s vast informal economy.

He projected that post-recapitalisation competition will be decided along digital battle lines, requiring underwriters to abandon manual distribution channels in favor of open APIs, automated straight-through claims processing, and data-driven actuarial pricing.

He charged insurers to scale up investments in niche, high-volume segments such as micro-insurance, parametric climate-risk covers for smallholder farmers, and non-interest Islamic finance options through Takaful windows.

Automating claims processing and improving customer touchpoints, he concluded, remain the non-negotiable prerequisites for rebuilding public trust and converting Nigeria’s massive population into active insurance consumers.