By Emmanuella Opara | October 26th 2026
KEY POINTS
- Nigeria’s insurance penetration target of 10 per cent by 2031 will require improved claims settlement and wider access to affordable policies.
- Digital claims processing and faster payments could help rebuild public confidence in insurers.
- Microinsurance and partnerships with financial institutions could extend coverage to low-income earners and small businesses.
- Embedded insurance offers opportunities to distribute policies through banks, cooperatives, digital platforms and other established customer networks.
- Industry stakeholders say recapitalisation must translate into better services, innovation and increased insurance uptake.
MAIN STORY
Nigeria’s insurance industry faces the challenge of converting stronger financial institutions into wider public participation, as global examples highlight the importance of affordable policies, efficient claims settlement and digital distribution in attracting customers.
The National Insurance Commission (NAICOM) has identified low public awareness, weak consumer confidence and fragmented distribution channels among the factors limiting insurance adoption in the country.
In September 2026, the regulator launched its Insurance Sector Strengthening Programme, which targets an increase in insurance penetration from about 0.5 per cent of gross domestic product to 10 per cent by 2031.
Meeting the target will require insurers to address the practical concerns that discourage households and businesses from purchasing cover, particularly the cost of premiums, accessibility of products and reliability of claims payments.
Experiences from other markets suggest that improving claims settlement could be an important starting point. In Singapore, MSIG Insurance reported a 94 per cent claims settlement ratio in August 2026, with 92 per cent of fast-track claims settled within three days.
Research conducted by Sollers Consulting and Ipsos across four countries also found that between 52 per cent and 63 per cent of insurance customers ranked prompt claims settlement among their top priorities after submitting a claim.
These findings suggest that customers judge insurers not only by the policies they sell but also by how efficiently they respond when losses occur.
For Nigerian companies, simplifying claims procedures, communicating documentation requirements clearly and providing regular updates could improve the customer experience. Electronic payments may also help reduce administrative delays once claims have been approved.
The Chairman of the Nigerian Insurers Association, Ebelechukwu Nwachukwu, said the industry must demonstrate that recapitalisation would lead to improvements in service delivery and coverage.
“We must resist the temptation to celebrate the recapitalisation as an end. The real test lies in translating stronger balance sheets into underwriting capacity, innovation, better claims service, and wider penetration,” she said recently in Awka, Anambra State.
Affordability is another consideration for insurers seeking to reach more Nigerians, particularly people with irregular earnings and limited disposable income.
In Kenya and Uganda, microinsurance company Turaco has partnered with financial services provider ASA International to distribute credit-life, life and hospital cash protection through microfinance loans.
The arrangement, launched in Kenya in 2025, offers premiums starting at $0.50 per month, with digital claims designed to enable payments in under 72 hours.
By integrating insurance into an existing financial relationship, the model reduces the steps customers must take to obtain protection.
Nigerian insurers could explore similar partnerships with cooperatives, microfinance banks, market associations, agricultural groups and digital lenders to reach customers who may not use conventional insurance channels.
Distribution is also an important consideration as insurers seek to extend coverage beyond major urban centres.
Embedded insurance, which allows customers to purchase protection alongside another product or service, offers one approach. Policies could be made available through vehicle financing, digital payments, travel bookings, agricultural input purchases and small-business loans.
An insurance expert based in the United Kingdom, Aliyu Yahaya, said this approach could lower distribution costs and make policies easier to obtain.
“For Nigeria, this could mean offering appropriate protection alongside vehicle financing, digital payments, agricultural inputs, travel bookings and small-business loans,” he said.
Digital technology could further improve access to insurance by enabling customers to purchase policies, renew coverage, submit documents and monitor claims without visiting physical offices.
A case study published by DBS in Singapore described a digital claims system that reduced average settlement time from about two weeks to almost instantaneous after approval.
Nigerian insurers could consider similar systems to automate routine claims processing, verify documentation and provide real-time updates. However, digital adoption would need to be supported by reliable systems and responsive customer service.
The recapitalisation exercise has created an opportunity for insurers to strengthen their financial capacity, but capital alone may not persuade uninsured Nigerians to purchase policies or encourage dissatisfied customers to renew existing cover.
The industry will also need to demonstrate that its products address relevant risks, premiums reflect customers’ financial circumstances and claims are handled in accordance with policy terms.
THE ISSUES
Nigeria’s low insurance penetration reflects a challenge extending beyond the financial strength of insurance companies. Public confidence, affordability, awareness and access all influence whether individuals and businesses consider insurance worthwhile.
Faster claims settlement could help address concerns about whether policyholders will receive compensation when covered losses occur. Flexible products and partnerships with organisations that already serve low-income customers could also make insurance more accessible.
Technology offers opportunities to reduce processing costs and improve communication, but digital platforms must deliver practical benefits rather than merely provide another channel for purchasing policies.
WHAT’S BEING SAID
“We must resist the temptation to celebrate the recapitalisation as an end. The real test lies in translating stronger balance sheets into underwriting capacity, innovation, better claims service, and wider penetration,” Ebelechukwu Nwachukwu, Chairman of the Nigerian Insurers Association, said.
“For Nigeria, this could mean offering appropriate protection alongside vehicle financing, digital payments, agricultural inputs, travel bookings and small-business loans,” Aliyu Yahaya, a United Kingdom-based insurance expert, said.
WHAT’S NEXT
Insurers will need to translate stronger capital positions into practical changes in product design, claims administration and distribution. Partnerships with financial institutions, cooperatives and digital platforms could help expand access, while improved customer communication may encourage policy renewals.
Progress towards NAICOM’s 2031 penetration target will depend on whether these measures translate into greater uptake among households and businesses.
BOTTOM LINE
Nigeria’s insurance industry has an opportunity to use recapitalisation as a foundation for wider coverage, but sustainable growth will depend on public confidence and accessible products. Global examples point to faster claims, affordable premiums and more convenient distribution as practical areas where insurers can improve their services and attract more customers.
