The Rise of Insurance Sector

Insurance sector, going by its performance in the past three years is heading towards occupying its pride of place in the financial services sector of the economy, writes Ebere Nwoji

The insurance sector is one of the sectors of the economy that has maintained  trajectory growth despite economic headwinds plaguing Nigerian businesses.  A critical look at the performance of the sector in the past three years shows that it has maintained a  fast growth in every area of its activities.

The overall growth picture portrayed by the sector is chronicled in its annual premium income  which has maintained steady growth by highe margins.

The year 2023 is remarkable in the growth history of the sector as in that year,the sector realised its tall dream of transformation from billion Naira premium income market to a trillion naira market  thus meeting the target set for the industry operators by the regulator, the National Insurance Commission(NAICOM) in 2009 through its Market Development and Restructuring Initiative (MDRI).

MDRI

NAICOM had  in  an earnest search for an initiative that will unveil the Nigerian insurance industry to the world for patronage and investment opportunities, launched  the MDRI initiative.

It was a medium term plan of the commission targeted at driving insurance penetration in Nigeria.

It’s main objective was  among other things to transform the insurance market from N164 billion annual premium income to N1trillion premium market between the year 2009 and 2012.

But this was not achieved until 2023 when it was realised to the jubilation of all  and Sundry in  the industry.

In that same year, the sector’s premium crossed the billion margin to hit N1.003 trillion for the first time.What this means is that it took the sector operators 14 years to meet this all important target set by the regulator.

 Since then the sector has maintained a steady high margin growth. In Q1 2024, premium grew by 51 per cent from N311 billion in Q1 2023 to N470.7 billion in Q1 2024.

In second quarter 2024, the sector grew its gross premium from N551.4 billion in Q1 2023 to N813.1 billion.

The sector’s  total premium for 2024 stood at N1.562 trillion showing 56 per cent growth from the 2023 figure.

In Q1, 2025 the industry premium stood at N769.2 billion showing N63.4 per cent year-on-year growth. In Q2 2025, the sector recorded N1.21trillion premium a 49.3 per cent increase from the figure it recorded in the corresponding period in 2024.

These results were contained in the Bulletin -of -the – Insurance- Market Performance published by NAICOM.

The Break Down

A breakdown of the sector’s performance showed that major growth drivers in the non-life segment of the market were oil & gas and fire insurances, which contributed 27.3 per cent and 24.1 per cent respectively. Motor insurance contributed N114.8 billion, general accident generated N59.1 billion, marine N69.1 billion .

Net motor insurance premium stood at N100.3 billion, fire N75.3 billion, general accident 39.0 billion marine 33.5 while oil and gas stood at N54.6 billion . In  terms of market performance percentages, motor insurance polled 66.5 per cent, fire polled 46.9 per cent, general accident 6.7 per cent, marine 30.9 per cent oil and gas 25.5 per cent. Highlighting claims settlement for the period, NAICOM said, life business recorded about 95 per cent of net claims to the total recorded claims during the year while the market average stood at about 71.4 per cent of the N536.5 billion gross claims reported at the close of fourth quarter, 2023.

The commission further noted that in a direct reflection to its  “no-premium no-cover” policy,  outstanding premium  continued to decline, as the industry posted just  1.6 per cent outstanding of all the premiums generated in the market during the period. 

It further said within the period under review, total assets of the sector stood at about N2.67 trillion while capitalisation stood at  N851 billion in 2023.

Giving a breakdown of claims payment by various classes, the commission said motor insurance class paid gross claims of N32.1 billion and net claims of N31 billion, fire insurance class paid gross claims of N61.5 billion and net claims of N41.3 billion, general accident paid gross claims of N22.3 billion and net claims of 17.0 billion, marine class had a gross claims of N16.9 billion and net claims of 12.0 billion while oil and gas class had gross claims of N157.1 billion and net of N54.6 billion.

In terms of market size and market capitalisation, NAICOM said non -life had N1.669 billion assets, life had N1billion bringing the market aggregate to N2.673 billion.

2024 Key Growth Drivers

In 2024, industry operators and analysts said the key growth drivers of the  sector in 2024 included digital transformation and technological adoption, which improved accessibility and efficiency. Others, they said, are regulatory changes like stricter solvency requirements and new laws that boosted confidence and macroeconomic factors, particularly the depreciation of the naira, which inflated foreign currency-denominated premiums. “Additionally, increased public awareness, improved claims payment processes, and a focus on non-life products like fire and oil and gas insurance contributed to the sector’s expansion,” the analysts said. 

In the area of technology adoption, They pointed to the adoption of Insurtech as  major factor adding that insurtech Companies leveraged technology to improve service delivery, customer satisfaction.

The regulator, they added, also  actively promoted digital transformation to enhance accessibility and efficiency. 

“Also, stricter solvency requirements and enhanced consumer protection policies were implemented to boost trust and stability. Just as the Nigerian Insurance Industry Reform Act (NIIRA) 2025 provided a more agile regulatory framework, which is expected to further align the sector with international best practices. Also improved claims experience and  increased confidence in the claims settlement process were significant factors in market growth<” the explained. 

They  also highlighted macro economic factors in form of depreciation of the naira inflated premiums from foreign currency-denominated policies, particularly in the oil and gas sector as a major growth driver in 2024.

Q2 2025 Performance

In Q2 2025, NAICOM in its market bulletin stated that Non-life segment retained its relative dominance as a growth driver contributing 67.2 per cent to the total premium pool, mirroring its performance in the corresponding quarter of 2024. “On the other hand, the life Insurance segment accounted for 32.8 per cent of all the premiums generated during the same period. The non-life segment indicated that the Oil & Gas portfolio remained the major contributor, accounting for 31.2 per cent of the total Non-Life premiums during the quarter.

“This was followed by Fire Insurance with 18.9 per cent and Motor Insurance at 15.8 per cent, while General Accident, Miscellaneous, Marine and Aviation portfolios contributed 8.9 per cent, 8.9 per cent, 8.8 per cent and 7.4 per cent, respectively. In the previous periods under review, these lines of businesses maintained their upper hands in premium generation,” it said.

Sector Assets

Analysis of NAICOM data showed that the sector’s assets has maintained the same growth trajectory since in 2023 when total asset was N3.003 trillion.

In 2024, total assets of the industry rose to N3.9 trillion and soared to N4.4 trillion in Q2 2025.

Industry operators attributed the sector’s overall growth within reviewed years to  increasing awareness and understanding of  value of insurance by Nigerians, regulatory reforms such as stricter solvency and reserve requirements for insurers, enhanced consumer protection policies to boost trust in the sector, and encouragement of digital transformation to improve accessibility and efficiency.

Obviously the sudden growth witnessed in the industry is not without a cause. There are clear indication that with growth of technology and advent of digital channels of insurance product distribution, more and more Nigerians, are in the recent past, beginning to understand and appreciate the value of insurance and this is driving demand for insurance products despite consumers’ economic odds.

Analysts are very optimistic that the operations of the new  Risk Base Capital  and NIIRA 2025 would  aid the sector to if not surpass the projected N2.5 trillion premium  by the regulator.