Nigeria’s insurance industry is preparing for major changes following the signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 by President Bola Ahmed Tinubu earlier this month. The new law introduces stricter capital requirements, compulsory insurance policies, and a comprehensive regulatory framework for digital insurance providers, including fintech platforms. Experts say these reforms could reshape the sector, strengthen public confidence, and expand access to coverage nationwide.
Economist and founder of Awabah, Tunji Andrews, described the law as a landmark development that could trigger consolidation, innovation, and long-term growth in the insurance industry. Speaking during an interview on News Central TV, Andrews stressed that the reforms were timely given the rapid changes in Nigeria’s financial ecosystem.
“The biggest obvious change is that in 2003, there was nothing called fintech. It didn’t exist. Now we have regulation for fintech businesses, for people who actually provide the cover and people who distribute, so it’s very encompassing,” Andrews said.
One of the most significant provisions of the NIIRA 2025 is the requirement for higher minimum capital for insurance companies. This mirrors past reforms in the banking and pension sectors, where undercapitalized institutions were forced to merge or exit the market. The move eventually created stronger, more reliable financial institutions.
Andrews noted that the same process is expected in the insurance space. “What you did see in the pension industry was that those who couldn’t raise the capital ended up merging or being sold to bigger ones, so you have stronger institutions. What this will create in the insurance space is that you have bigger, better insurance companies,” he explained.
Industry analysts believe the stricter capital base will reduce the number of weak players, push companies towards partnerships and mergers, and lead to improved service delivery. Stronger institutions are also expected to increase consumer trust, attract foreign investment, and drive insurance penetration, which has remained low in Nigeria compared to other African markets.
The law also tackles the regulation of digital insurance providers. For years, fintech firms have been offering coverage to Nigerians across different states without clear regulatory guidelines. While these platforms helped expand access, concerns grew over quality assurance and consumer protection. NIIRA 2025 introduces new rules to regulate both the providers and distributors of insurance products in the digital space.
Andrews explained that the law now ensures proper accountability for technology-driven providers. “My office is in Lagos, I can provide insurance in Abuja. What ensures that I give the kind of product that I say is on my billing? But now we have regulation,” he said.
By bringing fintech insurance operators under the supervision of the National Insurance Commission (NAICOM), the reforms aim to balance innovation with accountability. This is expected to improve transparency, protect policyholders, and create a more competitive digital insurance market.
In addition to capital and digital reforms, NIIRA 2025 introduces several specific measures that directly affect both companies and individuals. For instance, Section 96(1)(b) of the Act now permits motorists to present their motor insurance certificates in digital form during police checks or after accidents, a significant departure from the previously mandatory hardcopy. This shift reflects Nigeria’s broader move towards digital transformation in public services.
Section 37(1) of the new law also cracks down on unlicensed insurance agents. Anyone caught practicing without authorization now risks a six-month jail term or a fine of ₦500,000. This measure is aimed at curbing fraudulent practices that have damaged the industry’s reputation over the years.
Furthermore, Section 201 of the Act mandates that anyone running an online insurance business must obtain a license from NAICOM before operating in Nigeria. This provision is expected to improve standards in the digital insurance space, ensuring that only credible and compliant operators serve the market.
With these changes, the government hopes to align the insurance sector with President Tinubu’s vision of building a $1 trillion economy. Stronger insurance companies, better digital regulation, and compulsory insurance policies are seen as vital tools for financial stability, risk management, and long-term economic growth.
Industry stakeholders say the reforms could be a turning point for Nigeria’s insurance industry, which has long struggled with low penetration, poor public perception, and weak institutions. By setting a higher bar for entry and tightening regulation, NIIRA 2025 could finally position insurance as a key pillar of Nigeria’s financial system.
