Nigeria’s insurance sector has been urged to enhance its risk management strategies and product offerings in response to the United States’ imposition of a 15% tariff on Nigerian exports, effective August 2025.
The tariff increase, announced through President Donald Trump’s executive order on July 31, 2025, forms part of a broader revision of America’s reciprocal tariff system. The new measures place Nigeria alongside approximately 40 other countries facing penalties for what the U.S. considers an “unbalanced” trade relationship.
Insurance expert and public affairs analyst, Mr. Ade Adesokan, highlighted that this significant trade policy shift comes at a pivotal time, as Nigeria’s insurance sector has shown remarkable growth and resilience.
“The sector must adapt strategically to continue its impressive growth trajectory while supporting Nigerian exporters through this period of trade uncertainty,” Adesokan stated.
The 15% tariff marks an escalation from the 14% rate initially imposed in April 2025, which was temporarily suspended for 90 days and extended for an additional month to allow for negotiations. Under the new system, countries with a U.S. trade deficit face a default 15% duty on all imports, while those with a surplus pay a lower 10% rate. Nigeria, now part of the BRICS group of nations as of January 2025, faces further complications, with President Trump threatening an additional 10% tariff on countries aligned with BRICS policies. This could bring Nigeria’s tariff rate to 25%.
Despite these challenges, Nigeria’s insurance market has shown impressive growth, with total premiums reaching N1.56tn in 2024, a 56% increase from N1.00tn in 2023. Non-life insurance, particularly, accounted for N1.1tn, while life insurance contributed N470bn. The industry’s total assets grew to N3.9tn, up 46.1% from N2.67tn in 2023, with market capitalization rising to N1.2tn, a 41% increase from N850bn the previous year. The industry paid approximately N622bn in claims in 2024, with non-life insurance claims amounting to N437bn and life insurance claims N185bn.
Adesokan pointed out several insurance segments likely to face immediate challenges due to the tariff increase. Marine insurance is expected to be among the most affected, as insurers covering goods in transit may need to revise pricing models. Exporters might reduce shipment frequencies or consolidate cargo to manage the added cost burden.
“Trade Credit Insurance,” Adesokan noted, “is likely to see increased demand as exporters seek protection against non-payment due to market uncertainties in the U.S. However, this could also lead to a rise in claims if American customers delay payments or cancel contracts because of the tariff costs.”
Additionally, sectors such as Property and Casualty Insurance could be affected as manufacturing facilities and agricultural plants reliant on U.S. exports may reconsider expansion plans, prompting insurers to reassess asset valuations and coverage limits. Business Interruption Insurance could also see a surge in claims if Nigerian businesses, heavily dependent on the U.S. market, face operational disruptions or reduced revenues.
Adesokan further suggested that the tariff could accelerate Nigeria’s existing trend toward export diversification, which may have significant implications for the insurance industry.
“As exporters look to new markets beyond the U.S., insurers will need to adapt by developing expertise in assessing risks in these emerging trade corridors,” Adesokan explained. “This diversification could benefit insurers by spreading risk across different regions, though it will require investment in market intelligence and new risk assessment capabilities.”
He called for greater collaboration between key industry bodies such as the National Insurance Commission (NAICOM), the Nigerian Insurers Association (NIA), and the Nigerian Council of Registered Insurance Brokers (NCRIB) to monitor the situation and offer necessary guidance. He also suggested regulatory flexibility to enable insurers to innovate in response to evolving market conditions while ensuring adequate consumer protection and financial stability.
“Ultimately, the insurance industry must remain agile, responsive, and proactive to help mitigate the impacts of this new trade reality,” Adesokan concluded.
