The Managing Director and Chief Executive Officer of Pinnacle Insurance Brokers Limited, Dr. Dennis Nnorom, has disclosed that the Nigerian Financial Intelligence Unit (NFIU) has played a critical role in curbing fraudulent foreign transactions and illicit financial flows within Nigeria’s insurance industry. According to him, tighter reporting requirements and regulatory oversight have significantly reduced practices such as premium round-tripping, policy cancellations for cash extraction, and money laundering previously associated with the sector.
Speaking in an interview on recent reforms shaping the insurance landscape, Nnorom explained that under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, all premium movements, refunds, and return premiums are now subject to documentation and reporting to both NAICOM and NFIU. This, he said, has effectively closed loopholes that once allowed suspicious foreign funds to enter and exit the industry unchecked, strengthening transparency, credibility, and investor confidence.
Insurance Reform, Professionalism, and Market Discipline
With over three decades of industry experience, Nnorom described NIIRA 2025 as the most comprehensive insurance legislation Nigeria has ever had, consolidating past insurance laws into a single framework that strengthens governance, compliance, and market discipline. He noted that the Act clearly differentiates between insurers and brokers, reinforces recapitalisation for risk-bearing insurance companies, and supports the retention of capital within the local economy.
According to him, one of the industry’s long-standing challenges has been low insurance penetration, driven largely by lack of awareness, trust deficits, and the dominance of unprofessional operators in the past. However, sustained advocacy by NAICOM, the Nigerian Council of Registered Insurance Brokers (NCRIB), and professional bodies such as the Chartered Insurance Institute of Nigeria (CIIN) has helped improve public understanding and professionalism across the value chain.
Nnorom also emphasised the critical role of insurance brokers in protecting policyholders, particularly during claims settlement. He explained that brokers act as advocates for clients—ensuring fair loss assessment, proper documentation, and timely claims payment—services that come at no extra cost to the insured, as broker commissions are embedded in premiums by law.
Security Risks, Flexible Premiums, and Market Innovation
On the impact of insecurity, Nnorom noted that while heightened risk should ordinarily drive insurance demand, economic constraints and limited financial literacy have slowed uptake among individuals and small businesses. He, however, highlighted growing innovation in premium payment structures, including quarterly and half-yearly payment plans, with the potential for monthly premiums in the future—making insurance more accessible and affordable.
He also revealed that insurers, brokers, and banks are increasingly collaborating to finance insurance premiums for clients, a move aimed at deepening penetration and protecting more Nigerians against unforeseen losses.
Government, Infrastructure Insurance, and Economic Growth
Nnorom stressed that government remains Nigeria’s largest buyer of insurance, particularly for public assets and employee-related covers. However, he argued that more needs to be done to insure roads, bridges, public buildings, and infrastructure projects, noting that compulsory construction and public asset insurance would not only protect lives and investments but also unlock significant revenue for the insurance industry.
He cited ongoing discussions in the Federal Capital Territory (FCT) to make insurance compulsory for buildings under construction, similar to Lagos State’s model, as a step in the right direction toward safer urban development.
Tax Reforms, Trust Deficit, and Budget Discipline
Commenting on Nigeria’s evolving tax reforms, Nnorom acknowledged the necessity of taxation for governance but pointed out that trust remains the biggest challenge. According to him, citizens are more willing to pay taxes when they can clearly see the benefits in infrastructure and public services. He welcomed provisions in the new tax law that exempt low-income earners and focus taxation on net income, while cautioning that multiple taxation must be eliminated to avoid burdening businesses and consumers.
On budget implementation, he called for a shift toward treating government budgets as business plans—supported by proper monitoring, evaluation, and continuity across administrations. He disclosed his involvement with the Chartered Institute of Development Studies and Administration of Nigeria, established to build capacity in budget monitoring, evaluation, and execution.
Conclusion
Dr. Nnorom believes that recent reforms—anchored on NIIRA 2025, enhanced NFIU oversight, recapitalisation, and tax restructuring—represent a turning point for Nigeria’s insurance industry. While challenges remain, he is optimistic that improved governance, transparency, and professional standards will reposition insurance as a critical pillar of economic stability, risk management, and national development.
