Insurance Reform Law Raises Stakes for Nigerian Operators, Says DataPro

Kayode Tokede

Nigeria’s insurance industry is bracing for sweeping changes following the signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 by President Bola Ahmed Tinubu, a law that analysts say could transform the sector into a stronger and more resilient pillar of the economy.

The law, described by experts as the most ambitious reform in decades, consolidates outdated regulations and introduces tougher requirements. These include higher capital thresholds, a risk-based capital framework, an expansion of compulsory insurance, and stronger consumer protection measures.

According to the Managing Director of DataPro Limited, Mr. Abimbola Adeseyoju the reforms will test the industry’s adaptability while forcing operators to rethink their models. “An insurer’s strength is closely linked to the economic and regulatory context in which it operates. The NIIRA 2025 has significantly changed this context by consolidating outdated laws and mandating risk-based capital,” he said in the company’s September Briefs, a monthly economic outlook.

With just a 12-month window for compliance, the Act is expected to accelerate mergers and acquisitions as weaker firms seek to meet new capital requirements. Larger operators may benefit from scale, but smaller insurers could still survive through niche offerings or customer loyalty, Adeseyoju observed.

The expansion of compulsory insurance—covering group life assurance, public buildings and government assets—is also expected to generate new revenue streams. “Insurers with strong distribution and compliance strategies will be better positioned to achieve sustainable growth,” he added.

Beyond size and reach, the law places a premium on discipline. Sustainable profitability, sound underwriting, and prompt claims settlement will now weigh more heavily in determining an insurer’s standing. “Timely claims settlement will bring greater focus to customer service and earnings quality,” Adeseyoju noted.

But the story does not end with insurance. For Adeseyoju, the wider economy offers lessons in how ratings, resilience and credibility shape survival. “In the world of business, trust is currency,” he said. “Investors, lenders, regulators and partners all want assurance that a company is financially sound and capable of meeting its obligations. A strong rating signals stability, discipline and resilience. A weak one raises doubts and closes doors.”

To help companies strengthen those pillars, DataPro is hosting a Master Class in Kigali, Rwanda, on compliance, enterprise risk management and financial analysis.