Nigeria’s insurance industry is gaining serious momentum, with gross premiums soaring to ₦2.3 trillion in 2025, marking a 47.3% year-on-year increase.
According to the latest report from National Insurance Commission (NAICOM), the surge reflects strong growth across both life and non-life segments, driven by energy sector activity and rising demand for financial security.
Oil & Gas Leads the Non-Life Boom
The non-life insurance segment saw significant expansion, with oil and gas risks accounting for over 30% of total premiums—making it the largest contributor in the market.
Other key drivers included:
- Fire insurance, as businesses prioritize asset protection
- Motor insurance, fueled by increasing vehicle ownership
Together, these segments highlight a growing awareness of risk management among businesses and individuals.
Annuities Power Life Insurance Growth
On the life insurance side, annuities dominated with 44.3% of total premiums, reflecting a shift in how Nigerians plan for retirement.
This growth is largely linked to pension reforms, as retirees increasingly move their savings into stable, guaranteed income products.
At the same time, individual life policies are gaining traction, signalling a rise in retail participation and financial literacy.
Stronger Local Capacity, Better Retention
One of the standout improvements in 2025 was premium retention, which rose to:
- 68.1% overall
- 94.1% in life insurance
This indicates that more risks are being handled locally, thanks to:
- Improved pricing strategies
- Stronger capital positions
- Growing industry capacity
However, high-risk areas like marine, aviation, and oil & gas still face challenges.
Claims Payouts Boost Customer Confidence
Insurance companies paid out a total of ₦724.7 billion in claims, representing 31.5% of premiums.
Settlement ratios were also encouraging:
- 75.5% in non-life insurance
- 65.5% in life insurance
Notably, motor, accident, and miscellaneous insurance classes recorded over 80% claims settlement rates, helping to build trust among policyholders.
Profitability and Market Dynamics
The industry maintained a net loss ratio of 43.6%, with life insurance showing stronger performance overall.
However, some firms recorded loss ratios above 100%, pointing to:
- Pricing inefficiencies
- Capital constraints
Market concentration remains high in life insurance, where the top three companies control 55% of the market, while non-life business is more evenly distributed.
Industry Assets Continue to Grow
Total industry assets rose by 7.4% to ₦4.79 trillion, driven largely by the non-life segment.
Meanwhile, life insurance is gradually closing the gap, supported by pension-linked growth and annuity demand.
What This Means for Nigeria’s Economy
Analysts believe these trends signal a deepening insurance market, supported by:
- Ongoing recapitalisation efforts
- Increased activity in the oil and gas sector
- Rising financial awareness among Nigerians
Despite economic challenges, the insurance sector is playing a bigger role in managing risks and supporting long-term economic stability.
