The insurance sector in Nigeria is set for a major transformation. This follows the signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 by President Bola Ahmed Tinubu.
The law, which repeals all outdated insurance regulations, creates a single modern framework to support Nigeria’s economic ambitions. It introduces stricter capital requirements and enforces long-overdue reforms. These changes aim to align the sector with the country’s goal of achieving a $1 trillion economy.
The NIIRA Act 2025 increases the minimum capital base for insurers:
•Life insurance companies: from N2 billion to N10 billion
•Non-life insurers: from N3 billion to N15 billion
•Reinsurance firms: from N10 billion to N35 billion
These changes are expected to trigger a wave of mergers and acquisitions across the industry. The move will also strengthen the ability of insurers to underwrite larger, more complex risks.
In a statement, Presidential Adviser Bayo Onanuga noted the Act will boost transparency and innovation. According to him, the NIIRA 2025 aligns with the government’s ambition of building a resilient and globally competitive economy.
“The NIIRA Act 2025 ushers in a new era of transparency, innovation, and global competitiveness. It supports the vision of a $1 trillion economy,” he said.
The National Insurance Commission (NAICOM) has been directed to implement the Act. It will also issue guidelines to ensure a smooth and orderly recapitalisation process.
Industry leaders have praised the new legislation. Mr. Tope Adaramola, CEO of the Council of Insurance Brokers, said the law addresses long-standing challenges in the sector.
“This Act gives the insurance sector the push it needs to meet its true potential. Higher capital requirements will allow insurers to retain more risk locally,” he said.
He added that compulsory insurance policies previously ignored will now receive better enforcement, especially for public buildings and construction projects.
Adaramola also pointed out that with more capital, insurers can expand operations and hire more workers. This aligns with the government’s goal of reducing unemployment.
“The industry’s expansion will support job creation and national development,” he said.
Dr. Femi Ademola, Managing Director of AIICO Capital, welcomed the law. He said it could awaken Nigeria’s “sleeping” insurance sector.
“This is a big opportunity. With stricter rules and higher capital, the industry will gain investor confidence and increase awareness of compulsory insurance,” he stated.
Olatunde Amolegbe, CEO of Arthur Steven Asset Management, highlighted the importance of capital growth.
“You can’t grow beyond your size. If banks are recapitalising to fund large projects, insurers must also scale up to protect those investments,” he explained.
He noted that better-capitalised insurers would reduce the need to outsource underwriting abroad. This would help retain value within the local economy.
Key highlights of the NIIRA Act 2025 include:
•Stronger capital base for all insurance companies
•Enforcement of compulsory insurance policies
•Digitisation of insurance operations
•Faster claims settlement with strict timelines
•Protection funds for policyholders in case of insolvency
•Expanded regional participation, including the ECOWAS Brown Card Scheme
•Attracting new investments to the industry
According to Agusto & Co., recapitalisation could inject up to N600 billion in fresh equity into the sector. The firm estimates that the industry will generate over N1.1 trillion in gross revenue by 2024.
Insurance penetration in Nigeria remains below 1%. However, with the NIIRA 2025, double-digit growth is expected to continue or even accelerate.
The Nigerian Insurance Reform 2025 represents a critical milestone. It offers the insurance industry a chance to become a powerful engine of economic growth, employment, and financial security.
As implementation begins, all eyes are on how insurance firms will adapt, consolidate, and compete in this new era.
