How insurance companies can be resilient through economic headwinds

Insurance companies need to embrace strategic, customer-centric, and operational reforms to withstand Nigeria’s challenging economic terrain.

This was the submission of Chizoba Ehiogu, the Rector of the College of Insurance and Financial Management, during the BusinessDay Insurance Conference. The conference was themed “Resilience and Growth in Uncertainty: Charting the Path for Nigeria’s Insurance Industry.”

Speaking against the backdrop of sustained inflation, currency volatility, and weak consumer confidence, Ehiogu stressed that only companies with agile and forward-thinking strategies could thrive. “The only way we can return and stay in business during times of inflation or exchange rate fluctuation is to respond actively and smartly to the economic realities,” she said.

She outlined several pragmatic steps insurers must take to remain resilient. One major point was the improvement of premium collections and investment in short-term, highly liquid instruments. These instruments, she explained, will ensure companies have the cash to settle claims swiftly as unexpected expenses arise—an increasingly common scenario amid Nigeria’s volatile macroeconomic conditions.

In 2024, Nigeria’s top insurers were able to shore up their bottom lines through their investment earnings. For example, NEM Insurance posted a net investment result of N23.1 billion, despite its impressive N18.8 billion insurance service result. AXA Mansard’s N34.5 billion N34.5 billion net investment returns were also a significant boost to its 2024 financials.

Ehiogu also underscored the importance of pricing excellence. According to her, insurers must factor inflation, rising claim costs, and catastrophic risk into their pricing models. “Margin management and smart, loss-sensitive pricing will help us remain afloat during uncertainty,” she said, encouraging firms to go beyond traditional models by integrating more dynamic pricing strategies that reflect real-time risks.

Beyond the numbers, Ehiogu called for innovation in product development. She challenged insurers to create personalized insurance solutions that respond directly to the evolving needs of Nigerians.

“You cannot, at the time, not produce or develop products that will match the need and the language of the economy at that time,” she said.

“Personalized products sustain loyalty and enhance customer engagement, which is critical for long-term growth.”

Organisational resilience also took center stage in her address. Drawing from a conversation she had with an insurance renewal team lead, she shared how one firm boosted its renewal success rate from 40 percent in 2003 to 60 percent in recent years, with a target of 80 percent by 2025. This, she noted, reflects the power of a committed and motivated workforce. “A team that believes in the company’s vision, flowing from the board down to frontline staff, is essential to survival in turbulent times,” she added.

In closing, Ehiogu emphasised the need for insurers to remain connected with their customers and responsive to the economic environment. During crises like COVID-19, we saw that companies that adapted quickly, through digital solutions, customer care, and flexible products, emerged stronger. That lesson must never be forgotten, she concluded.

As the industry faces a future filled with uncertainty, her insights serve as a crucial roadmap for insurers seeking not just to survive—but to grow, through the storm.

David Olujinmi

David Olujinmi is a financial journalist, with a knack for reporting and analysing the capital markets. He has experience in reporting the Nigerian and African financial scene. With a Bsc in Chemical Engineering from the Obafemi Awolowo University, he has a significant grasp of numbers that has aided his understanding of the financial context.