Nigeria’s insurance premiums hit record N1.98trn

Nigeria’s insurance industry may be entering a structural turning point as rising inflation, asset values, and economic uncertainty push more households and businesses to seek financial protection.

In the first half of 2025, the sector generated N1.98 trillion in gross premium income, with every segment expanding by at least 25 percent, according to data from the National Insurance Commission (NAICOM).

This milestone represents a 54.2 percent surge from the same period in 2024, when it generated N813 billion, signaling a structural shift in the country’s risk landscape.

The breadth of the growth, spanning life, energy, retail, and compliance-driven segments, suggests the surge is not limited to corporate policies traditionally bought by large firms but increasingly reflects demand from individuals and smaller businesses.

“When inflation eats your savings, and the cost of losing a breadwinner becomes unbearable, life insurance stops being a luxury and starts being survival math,” said Abiodun, an analyst at Intelpoint.

The latest numbers suggest the industry is beginning to experience a behavioural shift driven less by regulation and more by economic realities.

Read also: Leadway Pensure sees PPP changing face of small businesses, end old age poverty

Life insurance leads the surge

The largest contribution came from life insurance, which generated N674.3 billion in premiums, representing a 70.3 percent increase year-on-year.

With insecurity ramping up in Nigeria, the financial shock of death or long-term illness has become harder to absorb without formal protection, especially as traditional support structures such as extended family networks weaken under economic pressure.

Life insurance, once considered a product for high-income earners, is increasingly being viewed as a financial buffer against unexpected shocks.

Retail risk protection gains momentum

Beyond life insurance, some of the fastest growth occurred in segments tied to consumer assets and trade.

Aviation and marine insurance, which covers cargo shipments and maritime risks, expanded 79.9 percent to N185.9 billion, reflecting strong demand for protection around imports, shipping, and logistics activities.

The miscellaneous insurance segment grew 86.7 percent to N104.6 billion, making it the fastest-growing category in the market.

The segment includes policies for specialised risks such as gadgets, events, and other personal assets, and it’s an area that appears to be gaining traction as Nigerians increasingly insure items that have become expensive to replace.

Smartphones, laptops, and other electronics now represent significant financial investments for households, sometimes costing several months of income. For many consumers, insurance is becoming a cheaper alternative to replacing those assets outright in the event of loss or damage.

The rise of small businesses and side enterprises has also contributed to demand for coverage for equipment, inventory, and event-related risks.

Compliance segments still dominate

Despite the rise in retail-oriented policies, corporate-driven segments remain central to the industry’s revenue base.

Oil and gas insurance, historically one of the largest segments due to regulatory requirements for energy operators, generated N443.4 billion in premiums, representing 25.8 percent growth year-on-year.

Other mandatory or compliance-driven segments also recorded strong increases.

Fire insurance rose 53.3 percent to N246.3 billion, while motor insurance expanded 52.5 percent to N207 billion.

Similarly, general accident insurance, which includes liability and accident covers, grew 49.6 percent to N121.4 billion.

The near-uniform expansion across segments indicates that the industry’s growth is not being driven by a single sector but by broader economic forces affecting households and businesses alike.

Inflation reshaping risk behaviour

The surge in premiums highlights how inflation is reshaping financial behaviour across Nigeria’s economy.

As prices rise and assets become more expensive to replace, the financial consequences of unexpected losses are increasing. This is pushing individuals and businesses to transfer risk through insurance rather than absorb losses directly.

In previous years, many Nigerians viewed insurance as an avoidable expense, often purchasing policies only when required by law. But the cost of remaining uninsured is becoming more visible as economic volatility persists.

Digital platforms, microinsurance products, and partnerships with financial institutions are increasingly being explored as ways to reach a broader customer base. For example, replacing a smartphone, repairing a damaged vehicle, or restocking business inventory can now require significantly higher spending than in previous years, making insurance protection more attractive.

The latest figures also highlight how quickly the industry’s revenue base has expanded over the past three years:

Nigeria’s insurance sector first crossed the N1 trillion mark in 2023, when gross premiums written reached N1.003 trillion for the full year, a milestone that signalled the beginning of a new growth phase for the industry.

Momentum accelerated in 2024, when premiums climbed to N1.56 trillion, representing a 56 percent increase largely driven by the foreign exchange revaluation of oil and gas policies, many of which are denominated in dollars.

But the scale of the industry’s recent expansion became clearer in 2025, when gross premium income reached N1.98 trillion in the first half alone, already surpassing the entire premium volume recorded in 2024.

The trajectory suggests that Nigeria’s insurance market is not only expanding rapidly but may also be entering a period of structural transformation as inflation, rising asset values, and greater risk awareness push insurance closer to the centre of household and corporate financial planning.