Nigeria’s insurance sector stands to gain public trust and expand its reach following recent regulatory reforms, according to financial experts, as President Bola Tinubu formalized a sweeping overhaul of the industry this week. The Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law on Tuesday, aims to modernize policies, enhance transparency, and align the sector with the nation’s broader economic ambitions.
Financial analyst Johnson Chukwu, founder of Cowry Asset Management Limited, emphasized the urgent need for clearer insurance documentation during a televised interview. Speaking on Channels Television’s The Morning Brief, Chukwu criticized overly complex policies laden with “exclusion clauses hidden in fine print” that often leave customers unaware of coverage limitations. He argued that simplifying contracts into concise, one-page summaries using plain language would empower policyholders and reduce disputes.
“Imagine a parent unknowingly letting their underage child drive an insured car, only to discover after an accident that the policy excludes minors,” Chukwu said, illustrating how opaque terms erode confidence. “Transparency prevents these scenarios by making requirements unmistakable.”
The newly enacted NIIRA 2025 directly addresses such concerns, mandating stricter capital requirements for insurers, faster claims processing, and digital transformation of services. Presidential spokesperson Bayo Onanuga stated the law repeals outdated regulations, consolidating them into a unified framework to improve oversight and consumer protection. Notably, the legislation includes provisions for policyholder compensation funds and mandates participation in regional risk-sharing initiatives like the ECOWAS Brown Card System, which facilitates cross-border accident coverage.
Chukwu highlighted the reform’s potential to resolve chronic issues like delayed claim payouts, a key deterrent for Nigerians. “Strengthening insurers’ financial capacity through higher capitalization will reduce defaults,” he explained, adding that robust firms could later emerge as major investors in domestic capital markets, fueling economic growth.
The changes align with Tinubu’s vision of growing Nigeria’s economy to $1 trillion, partly by positioning the country as a continental insurance hub. Analysts anticipate the reforms will attract foreign investment, improve regulatory enforcement by the National Insurance Commission (NAICOM), and increase insurance penetration, which currently lags behind regional peers. With compulsory coverage for high-risk sectors and digitized operations, the sector is projected to bolster financial inclusion while supporting infrastructure development and job creation—a critical step as Africa’s most populous nation seeks sustainable economic transformation.
