Under the Insurance Industry Reform Act (NIIRA) 2025, Nigerian President Bola Tinubu signed extensive insurance changes into law, according to a statement released by his spokesman on Tuesday.
WHY IT’S ESSENTIAL
The new law modernizes the industry by combining decades-old laws and implementing mandatory coverage criteria, greater capital requirements, and digitization targets
THE CONTEXT
Nigeria has one of the lowest insurance penetration rates in Africa, at less than 1%, far below South Africa’s 13.7% and Kenya’s 2.14%, according to statistics from regulators.
Global insurers, such as Sanlam and Allianz, which had gambled on long-term growth, were drawn to the industry despite this, as Gross Premium Written reached $1.9 billion by the end of 2023 and is expected to reach $7.84 billion by the end of the year.
BY THE DATA
Given their risk profile, insurers are required by the NIIRA Act to maintain minimum capital levels:
25 billion naira ($16.39 million) for non-life insurers
15 billion naira ($9.83 million) for life insurers
45 billion naira ($29.49 million) in reinsurers
Businesses that fail to meet these requirements risk being acquired or merged.
ESSENTIAL WORDS
“A new age of openness, innovation, and worldwide competition for the insurance sector is ushered in by the NIIRA Act 2025.
”It is consistent with the Federal Government’s goal of attaining a $1 trillion economy,” stated President Tinubu’s spokesman, Bayo Onanuga.
