Industry experts have projected that the Nigerian Insurance Industry Reform Act 2025 (NIIRA) will boost the insurance sector’s contribution to the Gross Domestic Product and restore confidence in the industry.
The Act, signed into law by President Bola Tinubu in July 2025, introduces fresh measures to deepen insurance penetration, strengthen the financial capacity of operators, and simplify how the sector operates. Stakeholders shared their views during the 10th annual conference of the Nigerian Association of Insurance and Pension Editors (NAIPE) held in Lagos.
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, said the Act was designed to reposition the sector for growth and ensure that companies have the strength to underwrite bigger risks. He was represented at the event by the Director of Legal, Enforcement, and Market Development, Dr. Tamis Usman.
Usman explained that NIIRA 2025 introduced two levels of capital requirements. The first is a minimum capital base: N10bn for life insurance, N15bn for non-life, and N35bn for reinsurance firms. He said this will allow operators to take on higher risks and retain more local business rather than losing it to foreign insurers.
The second tier is a risk-based capital model. He explained that under this model, operators must have capital that matches the level of their risk exposure. This ensures that insurers have enough financial strength to meet their obligations. According to him, the reform will not only improve efficiency but also build public trust.
“The role of the regulator is to make sure that operators pay claims. That will now boost trust in the insurance sector,” Usman said. He added that NIIRA also focuses on making operations simple and transparent. For instance, insurers are now required to issue policy documents in plain language before the commencement of any policy. This, he said, will help customers fully understand the contracts they are signing.
Speaking at the same event, the Executive Director, Business Operations of emPLE Life Assurance, Mr. Makanjuola Tubi, said the real test of NIIRA will be how the industry captures the untapped market, especially the informal sector.
Tubi pointed out that the informal sector contributes about 60 per cent to Nigeria’s GDP but has very low participation in insurance and pensions. He noted that if operators can design simple and affordable products for this market, the sector’s contribution to GDP will grow significantly. “As operators, we need to look for creative ways to expand and increase financial inclusion because opportunities are really there,” he said.
Also speaking, the Director-General of the Nigerian Insurers Association (NIA), Mrs. Bola Odukale, stressed that implementation is key. She said it is not enough to have a law on paper; the real benefits will only come when operators and regulators enforce the provisions.
Odukale added that the NIA will work closely with its members to ensure proper implementation of NIIRA. She also disclosed that the association is planning a wide sensitisation campaign to inform the public about the new law and its benefits.
She said, “A lot of people do not even know that NIIRA exists. We are going to work with our members to create awareness because if you look closely at the Act, you will see that it provides for several compulsory insurances, such as cover for tankers, petrol stations, buildings under construction, and containers. All these are meant to protect lives, businesses, and the economy.”
On the issue of claims, Odukale assured that the NIA is working with operators to ensure timely settlement. She said confidence in the industry depends on how fast insurers respond when claims arise. “If obligations are not met as they come due, the confidence of the people will continue to be eroded,” she warned.
Industry watchers say NIIRA 2025 has the potential to change the face of insurance in Nigeria. By increasing capital requirements, linking capital to risk exposure, and enforcing compulsory insurance, the Act could significantly expand insurance penetration. Analysts also believe that with improved claims settlement and better communication with the public, the industry will begin to regain trust, which has long been a challenge.
If properly implemented, the reform is expected to stimulate economic growth, create employment, and allow more Nigerians to benefit from risk protection. For many operators, the next few months will determine whether NIIRA 2025 will truly mark a turning point for the sector or remain just another policy on paper.
