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The National Insurance Commission (NAICOM) has unveiled a five-year industry reform programme aimed at raising Nigeria’s insurance penetration from about 0.5% of GDP to 10% by 2031 while extending insurance coverage and financial education to 25 million Nigerians.
The Insurance Sector Strengthening Programme (ISSP), launched in Abuja on Thursday, is designed as a 36-to-60-month intervention addressing some of the structural problems that have limited the growth and adoption of insurance in Nigeria.
Among the issues identified by the commission are low public awareness, weak consumer confidence, inadequate distribution networks, capacity constraints and limited access to insurance among women, young people and micro, small and medium-sized enterprises (MSMEs).
NAICOM Sets Interim 2028 Target
Under the programme, NAICOM plans to first raise insurance penetration to 1.5% of GDP by 2028, before pursuing the more ambitious 10% target by 2031.
The initiative will be implemented across Nigeria’s 36 states and the Federal Capital Territory, with different population and business segments identified as priority beneficiaries.
The programme is expected to reach five million Nigerians in the general population, two million women entrepreneurs and decision-makers, 1.5 million youths and 250,000 MSMEs.
NAICOM also plans to train 6,000 insurance professionals and intermediaries while supporting nationwide financial-literacy campaigns aimed at improving public understanding of insurance products.
Insurance Coverage Remains Low
The ambitious targets reflect the scale of the gap facing Nigeria’s insurance industry.
According to the ISSP executive summary cited by NAICOM, only about 5% of Nigerians currently have insurance coverage, while 78% lack basic knowledge of insurance.
Women account for approximately 32% of policyholders, while Nigerians between 18 and 35 years represent less than 20% of the industry’s customer base.
The situation is even more pronounced among businesses, with only about 8% of MSMEs currently covered by insurance.
NAICOM said the figures point to both a substantial untapped market and persistent structural barriers preventing more Nigerians and businesses from obtaining insurance.
Six Pillars Drive Reform Programme
The ISSP will operate around six strategic pillars covering advocacy and policy, awareness and education, capacity building, gender inclusion, youth engagement, and MSME and value-chain development.
The framework is intended to move the industry beyond simply increasing the number of policies sold and towards improving the quality of the insurance market.
Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Ayo Omosehin, said regulation must produce measurable improvements in insurance coverage, customer service and public trust.
He said the industry had reached a point where regulatory reforms must translate into tangible outcomes for policyholders and the wider economy.
Trust and Claims Settlement Take Centre Stage
NAICOM’s strategy places considerable emphasis on rebuilding confidence in insurance.
Omosehin said expanding the market would require insurers to strengthen capitalisation, underwriting standards, corporate governance and transparency, while ensuring genuine claims are settled promptly.
The commission believes improving these areas will be critical to convincing consumers that insurance provides practical financial protection rather than being viewed simply as a regulatory requirement.
The programme also seeks to improve the relevance and accessibility of insurance products, particularly for groups that have historically had limited participation in the sector.
Digital Technology Seen as Growth Lever
Digitalisation is another major component of the reform agenda.
NAICOM identified digital platforms, insurtech and data-driven business models as important tools for expanding access to insurance and responding to changing consumer behaviour.
For an industry that still struggles with fragmented distribution and low awareness, digital channels could provide insurers with a more efficient way to reach customers beyond traditional physical networks.
The commission’s emphasis on technology also aligns with its focus on younger Nigerians, who increasingly interact with financial services through digital platforms.
Women, Youths and MSMEs Targeted
The reform programme places particular emphasis on segments that remain underrepresented in Nigeria’s insurance market.
Women, young people and MSMEs are expected to receive dedicated interventions designed to improve their access to appropriate and affordable insurance products.
The broader programme targets 40% female participation among policyholders and industry professionals and seeks to increase youth participation in the insurance market to 30%.
For MSMEs, the programme aims to connect 250,000 businesses with affordable insurance solutions.
Industry Must Change How It Engages Consumers
Omosehin said increasing insurance adoption would require insurers to reconsider how they communicate with Nigerians and deliver their products.
For young consumers in particular, traditional approaches may not be sufficient to generate sustained interest in insurance.
The ISSP therefore combines public education with professional training, digitalisation and efforts to strengthen the industry’s distribution infrastructure.
The objective is to create an insurance market that consumers can understand, access and trust.
A Major Test for Nigeria’s Insurance Industry
NAICOM’s 10% penetration target represents a significant jump from the industry’s current position and will require sustained cooperation between regulators, insurers, intermediaries, financial institutions and other stakeholders.
Achieving the target will also depend on whether increased awareness translates into actual policy purchases and whether insurers can improve the customer experience sufficiently to retain new policyholders.
The commission’s five-year blueprint therefore places the Nigerian insurance industry at a critical point: expanding coverage will require not only more aggressive distribution but also stronger consumer confidence, better products, improved claims administration and greater use of technology.
If successfully implemented, the ISSP could substantially broaden insurance participation and create a larger pool of insured individuals and businesses by 2031.
For NAICOM, however, the immediate challenge is turning the ambitious targets into measurable progress from 0.5% penetration today to 1.5% by 2028 and ultimately 10% by 2031, while bringing 25 million Nigerians into a market that remains significantly underdeveloped relative to the size of the country’s economy and population.
