How Regulatory, Legislative Overhaul Dominated Insurance in 2025
The insurance sector in the year 2025 recorded great achievements in two major areas that have been plaguing its operations, writes Ebere Nwoji
Series of events that took place in the insurance sector in the outgoing year 2025 portray the year as year of regulatory transformation and legislative overhaul for insurance sector.
Indeed, it was a year the industry realised its dream of having a new legislation to replace the moribund 2003 insurance act, which the sector has been wobbling with in its search for growth, development and meaningful contributions to the economy.
Industry stakeholders said it was a year of double achievement for the insurance sector in the area of enthronement of regime of a new legislation, the Nigerian Insurance Industry Reform Act (NIIRA 2025) and a year of uninterrupted capital increase in line with risk-based capital model.
The industry has over the years experimented with different models of recapitalisation exercises from the tier base capital increase, which divided the insurance sector into three tiers in terms of minimum required capital to minimum solvency capital and Risk based capital increase. These were not concluded because of oppositions.
Heralding these positive developments in the industry within the year was high hopes and predictions made by both local and international insurers in their outlook for the year.
Nigerian insurers welcomed the year 2025 with expression of high hopes, enthusiasm and big dreams.
At the onset, precisely in the first week of January 2025, some insurers had in their outlook for the year told THISDAY that 2025 would be a year of uninterruptible recapitalisation and renewed legislation that would dismantle every stronghold that has held the sector hostage against its growth and developmental dreams.
Early 2025 Hopes, predictions
Stakeholders had anchored their hopes and predictions on the passage, late in 2024, of the Nigerian insurance Industry Reform bill by the upper legislative house and perhaps huge amount of N4 trillion allocation to infrastructural development by federal government in the 2025 appropriation bill, which the presidency presented to the joint session of the National Assembly, shortly before proceeding Yuletide holidays.
The insurers were optimistic that if the budget was passed into enabling act, some portions of the infrastructural fund would definitely hit their vaults through insurances of those projects.
Again, they believed that with the passage of the reform bill, going by the speed with which President Bola Ahmed Tinubu’s administration was treating economic matters on its table, the bill would later in the year 2025 secure presidential ascent. They also believe that once the bill gets ascent from the presidency, the insurance sector would be good to go in its efforts to secure its pivotal position in the finance services sector of the economy.
On its part, the sector regulator, the National Insurance Commission (NAICOM), believed without doubt that the Nigeria Insurance Industry Reform Bill if signed into law, would unlock the growth, prosperity, and potential of the insurance sector.
Describing the bill as a game changer for the Nigeria’s insurance industry that is going to have high positive impact on the contributions of insurance sector to the country’s GDP and economy as a whole, NAICOM said by consolidating existing insurance laws, the new legislation marked a new era in the efforts to strengthen the Nigeria’s insurance industry.
These and more were the hopes and predictions of the industry operators at the very beginning of the year 2025. Eight months after their predictions, precisely on August 5th 2025, President Bola Ahmed Tinubu signed the Nigerian Insurance Industry Reform Act (NIIRA) into law to the jubilation of the industry operators and insurance sector stakeholders.
NIIRA2025 automatically introduced higher minimum capital of N10 billion for life insurance underwriters, N15 billion for general business underwriters, N25 billion for composite firms that is underwriters of life and general business and N35 billion for reinsurers. The operators were given July 31,2026 as deadline for recapitalising their businesses.
The new capital regime was a big improvement from the former capital of N2bn for life underwriters, N3 billion for general business, N5 billion for composite firms and N10bn for reinsurers. The presidential assent to the insurance act sparked off series of developmental activities in the industry during the year with the regulator collaborating with various sectors of the economy to push insurance awareness and patronage.
Insurers’ efforts in 2025
One of the key issues the insurance sector in Nigeria fought gallantly to overcome was delayed and non-payment of claims, which they saw as major negative issue plaguing the image of the industry.
Efforts were made by both the operators and regulator to tackle the issue. It was also one of the key areas NIIRA 2025 focused attention.
Also, the industry during the year determined to leverage on technology to block every loophole through which businesses slip off operators’ hands.
The Chairman Nigeria Insurers Association (NIA), Mr Kunle Ahmed, speaking on tackling problem of claims settlement in the industry said that the association would through technology end the era of claims fraud and controversy over claims payment between the industry and insuring public by exploring the possibility of digital collation and tracking of claims payment to delight customers and reduce insurance fraud. Also, going by what the insurance commissioner said, the industry will from 2025 cease from reflecting figures of unpaid claims in their accounts book. This was after the Commissioner for Insurance, Mr Olusegun Ayo Omosehin had initially declared that the industry has zero tolerance to non-settlement of claims.
The operators through NIA, determined to digitalise the industry operations by launching a technology innovation hub it tagged “NIA innovation lab” in August shortly after the signing of the new legislation.
The association described the lab as a facility designed to accelerate digital solutions and reshape insurance practice in the country.
This came barely two weeks after the insurtech firms licensed by the regulator commenced operation. NIA invited applications from technology innovators and just few weeks back, it unveiled four innovators, namely: Bunce, Mycover.ai, Riwe Technologies and SEAMFIX as finalists to pitch their improved solutions designed for the 2025 NIA Innovation Lab Demo-Day.
The start-ups showcased their solutions to insurers, investors, and industry leaders for potential adoption, partnership and investment at the Insurers House, Victoria Island, Lagos.
The NIA Chairman, Mr Kunle Ahmed, said that the gathering was not only to showcase ground breaking ideas but also to reaffirm the insurance industry’s unwavering commitment to innovation as the cornerstone of its future.
Insurers in other climes
A peep into what happened among insurance industry outside Nigeria shores shows that Nigerian insurers were not off line in their choice of using technology innovations to drive their market. Early in the year, Deloitte in its outlook report on global insurance, especially, the US market said as risks become more complex and unpredictable and consumers more empowered, particularly with generative AI tools at their fingertips, insurers can no longer evaluate risks through the rear-view mirror. They should continue to evolve the way insurance works and how they interact with customers and distributors.
The report noted that it was becoming increasingly important for carriers to elevate technological and operational excellence, innovate product solutions and broaden the insurance value proposition—making the insurance safety net more reliable, accessible, and resilient.
Deloitte, said by modernising and streamlining infrastructure, operations and business models, insurers could develop a more forward-looking approach to risk modelling, assessment, analysis and mitigation.
“As insurers evolve their business models, it will be important to maintain trust with the customers and markets they serve. For example, after a period of consumer “sticker shock” from large non-life premium increases, coverage pullback and fears of surveillance from advanced technologies, the industry may first need to rebuild goodwill among stakeholders to help support their objectives. Indeed, machine learning and AI can amass and analyse vast amounts and sources of data, but insurers should provide transparency and fairness to help make these approaches acceptable to consumers and regulators”, Deloitte said.
Global insurance giant, Allianz Global Corporate & Specialty (AGCS) in its annual Directors’ and Officers’ insurance insights report taking a look into 2025 alerted global insurance directors and officers on the key risk trends in the year 2025.
The managers were cautioned on the risk that would emanate from insolvency, geopolitical tension and ‘AI washing’ which insurance experts said would dominate other risky lines of business in the new year.
The experts said risks from these aforementioned areas were most likely going to pose serious challenge to directors, managers and officers of insurance institutions.
“Directors and Officers (D&Os), have been operating in a highly complex environment throughout 2024, and further volatility can be expected during 2025,” it said.
Here in Nigeria, NAICOM early in the year warned insurance board members that it would no longer be business as usual insisting all hands must be on the deck to mitigate and reduce risks.
Sector’s 2025 performance
These activities led to positive performance of the industry in terms of premium generation during the year.
For instance, whereas in the year 2024 the sector generated N1.562 trillion, the NIA Chairman predicted that in 2025, the industry would generate N2 trillion premium.
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.
From the performance in the third and last quarter of the year, going by the unaudited financial statements of individual firms there are signs that the industry will hit the 2 trillion mark as predicted by the operators. Though NAICOM and NIA have not come out with the aggregate result of premium written in third and fourth quarter, reports from National Bureau of Statistics said the sector recorded 20.78 percent real growth in Q3 2025 positioning the insurance sector as one of the impressive performers in Nigerian economy during the year under review. These results were contained in the Bulletin -of -the – Insurance- Market Performance published by NAICOM. The industry’s assets grew from N3.9 trillion in 2024 to N4.4 trillion in Q2 2025.
Industry operators attributed the sector’s overall growth 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 was also aided by 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 optimistic that the operations of the new Risk Based Capital and NIIRA 2025 would aid the sector to, if not, surpass the projected N2 trillion premium by the regulator.
Regulatory focus in 2025
The Commissioner for Insurance Omosehin, highlighting some of the changes and initiatives introduced by the regulator during the year said the commission engaged in strong supervision, without slowing healthy growth among operators.
“We are dedicated to striking a balance between robust supervision and sustainable growth. By leveraging advanced risk-based supervision methodologies, we have optimised our regulatory framework to identify and address high risk areas, focusing our inspection and monitoring efforts on sectors and institutions that pose the greatest risks to market stability.”
He also said the commission embarked on promoting risk informed decision by ensuring that boards and management of the industry align their capital, controls, and strategy with their risk profile, fostering a culture of risk awareness and risk management.
“Our goal is to deliver a resilient, fair, and efficient insurance market that balances prudential oversight with growth and innovation, protecting policyholders’ interests while supporting the industry’s development,” Omosehin said while addressing the media on his score card in NAICOM during the year under review.
He highlighted the commission’s other areas of focus during the year as cleaner market conduct and faster redress through elevating the standards for transparency and accountability in the insurance industry by tightening expectations disclosure requirements. Ensuring policyholders receive clear and concise information about their insurance products, promoting fair and transparent sales practices that prioritise policyholders’ interests.
Ensuring insurance products were priced fairly and without bias. Streamlining claims processing and ensuring prompt settlement of genuine claims.
Ensuring timely resolution of policyholder grievances as well as providing clear and efficient channels for policyholders to escalate concerns.
Other 2025 Events
Other important events in the industry during the year include the commencement of underwriting business by the Nigerian Police insurance firm and effective enforcement of the compulsory motor insurance by the Nigerian police force. The investiture of Ekeoma Ezeibe as new president of Nigerian Council of Registered Insurance brokers (NCRIB), Nigeria hosting of WAICA Education Conference between 12th to 15th October by NIA with discussion centered on West African Insurers and challenge of climatic change and various collaborations and partnerships between NAICOM and various agencies of government all targeted at insurance penetration to different sectors of the economy.
Despite eroded income of the masses during the year 2025, the sector had a fair share of positive developments in the economy. It’s areas of achievement will in the years to come reposition the industry to a positive bounce back if operators will diligently align with the new legislation in NIIRA 2025.
