By LOVETH AZODO, Lagos
In 2025, Nigeria’s insurance sector is shedding decades of underperformance and signalling stronger relevance in the national economy.
Once weighed down by low public trust, weak regulation and minimal market penetration, the industry is now navigating a transformative year propelled by the landmark Nigerian Insurance Industry Reform Act (NIIRA) 2025, robust company performance and renewed investor interest.
From Dormancy to Growth: Performance Trends in 2025
For years, the Nigerian insurance industry consistently under-performed globally, with penetration rates below 1% of GDP, far below continental peers. However, recent quarterly data reveal meaningful growth on several fronts.
According to figures from the National Insurance Commission (NAICOM), the industry gross written premium (GWP) reached about ₦1.213 trillion in Q2 2025, up 49.3% year-on-year, with total industry assets topping ₦4.4 trillion, a notable increase when compared to previous years.
Despite macroeconomic headwinds such as persistent inflation, rising claims payments and higher reinsurance costs, insurers recorded stronger aggregate top-line performance in 2025, although profitability outcomes were mixed across the market.
According to industry reports, in the first nine months of the year, 15 listed insurance companies generated a combined insurance revenue of about ₦605.46 billion, representing a 34 per cent year-on-year increase.
Profitability improved for several key players. AIICO Insurance Plc, Veritas Kapital Assurance Plc, NEM Insurance Plc and Universal Insurance Plc all posted notable growth in profit before tax (PBT) during the period under review.
AIICO Insurance recorded ₦15.25 billion PBT in the first nine months of 2025, reflecting a 10.7 per cent increase from ₦13.78 billion in the corresponding period of 2024.
Veritas Kapital Assurance posted ₦4.88 billion PBT, up 64 per cent from ₦2.98 billion, while NEM Insurance reported ₦23.77 billion PBT, representing a 52 per cent rise from ₦15.71 billion a year earlier. Universal Insurance Plc also delivered a strong performance, recording ₦1.13 billion PBT, an 87.3 per cent increase from ₦602.98 million in the same period of 2024.
However, the performance was not uniform across the sector. LASACO Assurance Plc was the only insurer among the 15 that declared a loss, posting a loss of ₦404.22 million in nine months of 2025, compared with a profit of ₦2.27 billion in the corresponding period of 2024.
The company attributed the reversal largely to rising insurance service expenses and higher reinsurance costs, which significantly pressured earnings during the period.
In addition, some of the industry’s major players recorded sharp declines in profitability.
AXA Mansard Insurance Plc, Consolidated Hallmark Holdings Plc and Cornerstone Insurance Plc all posted lower profit before tax in the period under review.
AXA Mansard Insurance reported ₦6.1 billion PBT, representing an 82.3 per cent decline from ₦34.48 billion recorded in nine months of 2024.
Cornerstone Insurance Plc posted ₦8.32 billion PBT, a 68.7 per cent drop from ₦26.59 billion in the corresponding period last year, underscoring the impact of cost pressures and underwriting challenges on earnings across parts of the market.
NIIRA 2025: Regulatory Reboot
The pivotal change for the sector arrived with the Nigerian Insurance Industry Reform Act (NIIRA), signed into law mid-2025.
The Act replaced the outdated 2003 Insurance Act and introduced substantially higher Minimum Capital Requirements (MCRs), ₦10 billion for life insurers, ₦15 billion for non-life, ₦25 billion for composite and ₦35 billion for reinsurers with a compliance deadline in mid-2026, pushing companies to strengthen balance sheets and deepen market confidence.
The Commissioner for Insurance, Olusegun Ayo Omosehin, has underscored that “trust is the bedrock of our industry… without transparency, integrity and accountability, sustainable growth and lasting success are unattainable.” This statement reflects a regulatory push toward improved claims settlement standards and enhanced consumer protection under NIIRA.
The new law also empowers NAICOM to withdraw licences of firms that fail to recapitalise within the stipulated period.
Market Outlook: Opportunities and Risks Looking ahead, stakeholders agree that while the Nigerian insurance industry has made visible progress in 2025, significant execution risks remain as the sector transitions into the first full year of NIIRA implementation in 2026.
NAICOM has been forthright about the challenges encountered during the year.
Speaking at an industry forum in late 2025, Omosehin, acknowledged that macroeconomic pressures, particularly inflation, foreign exchange volatility, rising operational costs and reinsurance expenses have weighed on insurers’ balance sheets, even as revenues improved.
He also pointed to the complexities around mergers, acquisitions and capital mobilisation as potential friction points for some operators as recapitalisation timelines draw closer.
“Recapitalisation is the foundation, not the finish line,” Omosehin said, stressing that “strong balance sheets must be supported by sound risk management, governance and operational discipline if the industry is to achieve sustainable growth.”
Regulators have made it clear that 2026 will be a defining year. NAICOM expects full compliance with the new minimum capital requirements by the July 2026 deadline, warning that firms unable to meet the thresholds risk licence withdrawal or forced consolidation.
Beyond capital, the Commission has signalled its intention to intensify capital verification, risk-based supervision and enforcement of compulsory insurance policies, areas long seen as weak links in the sector.
Industry analysts believe that these measures, if consistently enforced, could finally address one of the sector’s most persistent problems: public confidence.
According to market observers, improving claims settlement discipline, transparency and consumer protection will be just as critical as balance-sheet strength in determining whether NIIRA delivers its intended impact.
There is also growing emphasis on digitalisation and innovation as pathways to deeper market penetration.
NAICOM and industry leaders have repeatedly highlighted partnerships with fintech firms, technology-driven distribution models and simplified micro-insurance products as essential tools for expanding coverage beyond corporate and oil-and-gas-heavy portfolios.
Economists, however, caution that macroeconomic conditions could continue to temper short-term profitability, even as premium volumes rise. Inflationary pressures, exchange-rate movements and climate-related risks are expected to keep underwriting margins tight in the near term, especially for insurers with weaker risk pricing frameworks.
Still, the medium-term outlook appears cautiously optimistic. With higher capital buffers, clearer regulation under NIIRA, improving industry discipline and increased regulatory resolve, analysts project that insurance penetration could gradually rise toward 1.5–2 per cent of GDP over the next few years, provided enforcement remains consistent and consumer engagement improves.
Ultimately, 2025 may be remembered as the year Nigeria’s insurance industry laid the groundwork for structural change.
Whether 2026 becomes the year that change translates into broader trust, deeper penetration and sustainable profitability will depend on how effectively regulators and operators convert reform intent into day-to-day execution.
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