Key points
- Taking pension funds out of the insurance mix is keeping Nigeria’s coverage rates under 1%.
- South Africa and Kenya perform much better because they keep pensions and small micro-insurance plans together.
- Regulators are now licensing small micro-insurance firms to cover everyday workers like farmers, traders, and artisans.
- The industry is holding itself back by moving too slowly on adopting modern digital technology.
- Widespread ignorance and relying strictly on spiritual protection keep many people from buying insurance.
Main Story
The President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs. Ekeoma Ezeibe, has attributed Nigeria’s low insurance penetration rate to the exclusion of pension funds from the country’s insurance market calculations.
Speaking on Tuesday at the 2026 Inaugural Annual Insurance Week held at Nnamdi Azikiwe University, Awka, Anambra State, Ezeibe said insurance penetration in Nigeria remains below one per cent, significantly lower than figures recorded in other African countries.
According to her, South Africa records insurance penetration of nearly 12 per cent, while Kenya stands at over seven per cent because both countries include pensions and micro-insurance in their overall insurance market metrics.
She explained that Nigeria’s insurance sector lost access to a substantial pool of funds following the enactment of the Pension Reform Act, which transferred retirement savings management to the National Pension Commission (PenCom).
“The pension industry holds trillions of naira that would ordinarily contribute to the strength and size of the insurance sector if measured within the broader insurance ecosystem,” she said.
Ezeibe noted that reintegrating pension assets into insurance market calculations would significantly improve the industry’s penetration figures and overall market performance.
She also highlighted efforts by the National Insurance Commission (NAICOM) to deepen insurance inclusion through the licensing of specialised micro-insurance companies targeted at low-income earners.
According to her, the firms are designed to provide affordable insurance coverage for artisans, farmers, traders and other informal sector operators by pooling small premium contributions into sustainable risk-protection schemes.
The NCRIB president further identified inadequate technological adoption as a major challenge confronting the industry, saying many operators have yet to fully embrace digital solutions needed to improve efficiency and service delivery.
She also cited low public awareness as a significant barrier to insurance uptake across different income groups.
Ezeibe said many Nigerians still rely solely on faith-based beliefs for protection against unforeseen risks, rather than adopting formal insurance products to safeguard their lives, businesses and assets.
She urged stakeholders to intensify public education campaigns to improve understanding of insurance and its role in economic stability.
In their separate remarks, the Vice-Chancellor of Nnamdi Azikiwe University, Professor Ugochukwu Anyaehie, and the programme coordinator, Professor Victor Okonkwo, expressed the institution’s willingness to collaborate with insurance professionals in promoting insurance awareness and developing technology-driven risk management solutions.
The Issues
- Getting trillions of naira in pension funds back into the insurance system to show the true scale of the market.
- Making micro-insurance plans cheap and simple enough for everyday market traders to trust them.
- Changing the public mindset so people stop ignoring practical safety tools in favor of spiritual protection alone.
What’s Being Said
- Looking at how other countries manage their money, NCRIB President Ekeoma Ezeibe said that the big drivers in places like South Africa and Kenya are pensions and micro-insurance, but in Nigeria, pensions were cut out and sent elsewhere.
- Challenging the idea that people do not need insurance because of faith, Ezeibe said that God gives people the intelligence to take care of themselves, which makes creating awareness about insurance very important.
What’s Next
- Micro-insurance firms will start going into local markets to sign up petty traders and farmers.
- University departments will work with insurance experts to create simple financial training programs for young people.
- Insurance operators will build easier mobile phone tools so people can sign up for policies and get claims paid faster.
Bottom Line
Nigeria’s insurance usage is stuck below 1% because pension funds are kept separate and the industry has been slow to use modern technology, leading brokers to push for simple micro-insurance plans and better public education to fix the problem.
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