Accelerating Insurance Sector Contributions to GDP

Going by recent report of the National Bureau of Statistics on contribution of the financial services sector to GDP, insurance sector’s growth was rapid in 2025, yet its contributions to GDP remains minimal, writes Ebere Nwoji

Recent report by the National Bureau of Statistics (NBS)  titled,  “Nigerian Gross Domestic Product,” on contributions of the various sectors of the economy  to the GDP for the Q4 2025, said  the finance services  sector,  mainly banks and insurance contributed N6.58 trillion  to the GDP. This is about 15 per cent increase over N5.74 trillion it contributed in the same period in 2024.

The NBS in the report revealed that banks recorded a growth of N5.87 trillion in 2025, representing an increase of 14.36 per cent from N5.13 trillion reported in 2024.

For the insurance sector, the report said it recorded N710.58 billion contribution in 2025, up by 16.04 per cent from N612.35 billion in 2024.  

A breakdown revealed that both the banking and insurance sectors contribution to GDP in Q1 2025 was at N1.78 trillion, up by 15.03 per cent from N1.55 trillion in Q1 2024, while in Q2 2025, it was at N1.65 trillion, about 16.13 per cent high from N1.42 trillion in Q2 2024.   

In Q3 2025, the finance and insurance sectors contribution to GDP stood at N1.51trillion, nearly 20 per cent increase over N1.26 trillion in Q3 2024.  In addition, it was N1.64 trillion in Q4 2025, about 8.3 per cent growth over N1.51 trillion in Q4 2024. 

According to the NBS report, the banking sector accounted for 90.43 per cent, while the insurance accounted for 9.57 per cent of the finance and insurance sector in real terms growth in Q4 2025.  

Looking at the report,  although neither the National Insurance Commission (NAICOM), nor the Nigeria Insurers Association (NIA), the umbrella body of insurance underwriters has released its  own figures as per performance of insurance sector in Q4 2025, one can easily see that in Q4 2025, Nigeria’s insurance sub-sector  stood tallest in growth terms among other arms of the finances service sector, including banks. 

Insurance sector growth 

The NBS report said insurance recorded an impressive growth of 21.37 per cent in Q4 2025.

To insurance sector operators and other stakeholders, this is a cheering news and one that ignites hope of very bright future for insurance over other sectors. Indeed, insurance performance during the year under review as portrayed by the NBS report is a confirmation of analysts’ predictions on the sector ‘s outlook for 2025 as reported by THISDAY and other analysts early in the year.

In January 2025, THISDAY in its outlook report for the year stated: “Latest developments in insurance sector have raised high hopes among insurers that 2025 will be a year of good opportunities.”

THISDAY in the outlook further said, “As business operators in various sectors   open shops for start of another business year in 2025, insurance operators are starting the new year with enthusiasm, high hopes and new dreams. To the insurers, 2025 was a year of uninterruptible recapitalisation and renewed legislation that would dismantle every stronghold that had held the sector hostage against its growth and developmental dreams.”

The report further said insurers’ optimism in the new year was  no doubt anchored 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 on Yuletide holidays. “The insurers are optimistic that if the budget is passed into enabling Act, some portions of the infrastructural fund would definitely hit their vaults through insurances of those projects. The insurers believed that with the passage of the reform bill, going by the speed with which the present administration treats economic matters on its table, the bill will this time secure presidential ascent. They also believe that once the bill gets ascent from the presidency, the insurance sector is good to go in its efforts to secure its pivotal position in the finance services sector of the economy,” the report said.

In line with this outlook and forecast, the NBS report attributed the positive performance of both banks and insurance sectors to major reforms in the financial sector, increasing number of daily transactions banks and impact of innovations from Fintech companies that have played a critical role in financial inclusion.  

According to the report, the recapitalisation exercise directive by the Central Bank of Nigeria (CBN) and the National Insurance Commission (NAICOM) dominated the sector in 2025.

Specifically, the objective of the CBN recapitalisation program is to strengthen the financial system, enabling banks to support long-term projects and economic growth. The exercise attracted foreign investors and inflows that has enhanced banks’ capital base”, the report stated.

Insurers confirmed the NBS attribution of the insurance sector growth to reforms going on in the sector.

 President of Nigeria Council of Registered Insurance Brokers (NCRIB), Ekeoma Ezeibe, in her submission on the huge growth recorded by insurance sector said, “I am happy and proud to see that this is happening during my presidency of the NCRIB which my tenure started at the beginning of Q4 2025.I will say that the main drivers of  this is the signing of  the Nigeria Insurance Industry Reform Act (NIIRA 2025)  by president Bola  Ahmed Tinubu.

“NIIRA is a transformative insurance legal framework that has provided for so many things among which are the increase in the share capital of insurance industry through risk based or minimum capital requirement whichever is higher.”

Speaking further on the relevance of the new insurance Act to the growth witnessed by the sector, Ezeibe said, “NIIRA also increased the professional indemnity of insurance brokers to N100bn or 50 percent of each company’s previous year’s revenue whichever is greater.”

NIIRA went on to strengthen claims processing measures so that customers’ trust in insurance is enhanced.

She noted that other protective measures it has put in place include shorter period of time to settle claims, creation of accident victim compensation fund for victims of uninsured drivers or hit and run drivers adding that it also created policy holders protection fund for insurance companies that have become insolvent.

“The act gave the regulator the power to settle claims from statutory deposit of any insurer with the CBN an insurer who have not settled claim within the time the law allows, it also increased fines and penalties that the regulator will give operators who have committed one infraction or the other,” she stated.

Insurance low contribution to GDP

But despite this much celebrated growth of insurance sector, judging by the specific contribution of each arm of finance services sector of the economy, insurance obviously still has a long way to go in terms of matching banking sector in contribution to the GDP.

Although the NBS in the report put contributions of the finance sector at 15 per cent growth in the Q4 of 2025, it went further to break it down that between banks and insurance the inequality in terms of contributions to GDP is very clear.

While Bank contributed 90.43 percent to the GDP, Insurance only contributed mere 9.57 percent showing that insurance contributions to the GDP is still less than 1 per cent as has been reported over the years. Whereas among Nigerian neighbours, insurance contributes significantly to their GDP. For instance South African’s insurance sector contributes 12 per cent to 14 per cent to the GDP of the country, Kenya’s insurance sector contributes 2 to 3 per cent, Namibia over 7 per cent, Mauritius over 4 per cent, Morocco over 4 per cent, Botswana and Tunisia over 2 per cent each. Egypt contributes over 1 per cent. Of these countries their population is much lower than the population of Nigeria raising the question on what should Nigeria do to match its population growth with insurance growth.

Operators’ reactions 

Ezeibe in her chart with THISDAY said it was true that the NBS said that of the over N6 trillion contribution of finance services sector, insurance contribution was very minimal. She said while it is smaller  in comparison  the  important thing is that the “needle is moving”.

“While it is still below one percent at the end of the day the needle is moving. The needle moved in by end of 2024, the needle kept on moving in 2025 by the end of Q4 2026 with all that are being done by both operators and regulators by the end of Q4 2026, the needle would have significantly moved,” she stated.

She highlighted efforts by operators to keep the growth moving saying, “For the NCRIB, we are meaningfully contributing and we have gone far in the arrangement with my Abia State pilot scheme of the major driver of my trust of office of insurance penetration. We have been in several meetings constituted the Abia state government team and NCRIB team,” she stated.

Commissioner for insurance

The commissioner for insurance, Olusegun Ayo Omusehin in his recent address to insurance stakeholders in one of the columns of the paper titled “The Reform Context said no stone will be left unturned in the present efforts to transform the insurance sector. 

According to him, the transformation of the sector started before NIIRA 2025. He said however, the new Insurance Reform Act provided the impetus to scale the transform. “With NIIRA 2025 now in force, we have a once in a generation opportunity to modernise the rulebook, raise governance and prudential standards, accelerate digitisation, and expand access. Our regulatory agenda will focus on five mutually re-enforcing priorities.

On financial soundness — risk-based capital and ORSA c driven supervision that scale with complexity.