Nigeria's insurance debate is moving from capital and premium growth to a harder question: will more people choose cover and trust it when they claim?
An ISSP launch panel argued that simple products, digital access, reliable claims, shared data and cooperation across banking, insurance and regulation must shape the next stage of market development.
Insurance Must Be Useful, Visible, Simple
Nigeria's insurance sector can grow rapidly and still fail to change household behaviour. The more demanding measure is participation: whether people buy cover voluntarily, understand the promise and receive value when a loss occurs.
That distinction shaped a panel discussion themed “Strengthening Nigeria’s Insurance Ecosystem – Collaboration, Innovation and Inclusive Growth” at the September 3 launch of the Insurance Sector Strengthening Program in Abuja.
Speakers from regulation, banking, takaful and programme leadership discussed how to reach young people, women, MSMEs and communities outside Lagos and Abuja.
The panel's evidence pointed in one direction.
- Nigeria already has payment rails, national identifiers, credit information and rising premium income.
The missing puzzle is a simple trusted system that converts those assets into active protection.
The panel included Bankole Oloruntoba – CEO, Nigeria Climate Innovation Centre, Moderator; Ekerefe Ola Gam-Ikon, Deputy Commissioner, Finance & Admin, NAICOM; Aminu Tukur, Vice Chairman, Noor Takaful; Bukola Smith, MD, FSDH Merchant Bank (represented by Kubi Momoh); and Rashidat Adebisi, Financial System Architect and Immediate Past Chief Client Officer, AXA Mansard.
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Low Participation Reveals A Deeper Trust Problem
Aminu Tukur, vice chairman of Noor Takaful, offered the panel's clearest reframing:
- The company did not see a penetration problem alone
- It saw a participation problem.
He asked how many people had independently bought insurance rather than receiving compulsory or employer-provided cover.
That question changes the diagnosis.
- Low penetration can invite a campaign focused on sales.
- Low participation requires better products, understandable terms, reliable claims and visible proof that insurance works.
Tukur said 32% of Noor Takaful participants surveyed had never previously held an insurance policy, even though the sample came from Lagos and Abuja rather than harder-to-reach areas.
Claims culture carries particular weight.
- Tukur said Noor Takaful asks claims staff to look for reasons to pay and gives board attention to repudiated or denied claims.
That approach recognises that every denial affects more than one customer. It shapes the stories families and business networks tell about the industry.
The Panel Mapped Existing Routes To Scale
Kubi Momoh, executive director for risk management and executive compliance at FSDH Merchant Bank, said banking infrastructure already provides much of the data and reach insurance needs.
- National identity records, phone-linked payments, bank accounts and credit histories can support customer verification, recurring collection and risk assessment.
She also connected insurance with MSME finance.
- Partial credit guarantees already reduce lender risk in some programmes, but capital remains limited relative to the size of the market.
- Wider insurance protection could help banks finance smaller businesses while managing regulatory limits on non-performing loans.
Ekerefe Ola Gam-Ikon, Deputy Commissioner Finance & Admin NAICOM, described a new directorate for innovation and regulation, an innovation forum, and insurtech guidelines.
- Three insurtech licences had been issued, and 13 applications were awaiting approval, including two standalone digital insurers.
- Regulatory sandboxes were also testing ideas and products.
The opportunity is demographic.
Speakers estimated that 60% to 70% of Nigeria's population is under 35 and argued that paper-led distribution cannot serve a mobile-first market.
- The challenge is to make digital access simple without weakening disclosure, security or the ability to speak with a person when a claim becomes difficult.
Premium growth does not settle that question.
- The panel cited rapid increases in industry income and an ambition to reach much higher penetration.
- These figures show commercial momentum, but they do not reveal how many people hold active voluntary policies, renew them or receive claims.
Participation metrics must sit beside financial growth if reform is to reach households.
Reliable Claims Can Change Household Behaviour
If participation rises, insurance can become a practical safety net rather than an unfamiliar financial product.
- A family with life cover has a defined response to loss.
- An MSME with bundled fire, accident and asset protection can recover without destroying its working capital.
- A lender can assess a protected business differently from one exposed to a single uninsured shock.
The panel argued for bundles because customers do not necessarily want several technical policies.
- A business owner may need life, personal accident, fire and asset cover within one understandable arrangement.
- Simplicity should apply to the agreement and the claim, while mandatory disclosures remain clear and visible.
ISSP leadership also stressed the value of research.
- The insurance sector needs standard data on who buys, who renews, who claims, why claims fail and which payment schedules match actual incomes.
- An employee survey cited during the panel found that even people working inside insurance companies did not always buy cover themselves.
- Awareness therefore cannot substitute for relevant products.
Visibility matters after loss.
- When public authorities announce relief after a market fire, the public rarely hears what insurers paid.
- Publishing credible outcomes for claims can show insurance in action and reduce dependence on discretionary government support.
That evidence may persuade more customers, rather than a general advertising campaign.
Collaboration can also reduce distribution costs.
- Banks already maintain payment relationships, fintechs provide digital interfaces, insurers carry risk and brokers or community agents can explain products.
- The panel argued that these institutions should connect their strengths rather than duplicate expensive networks.
Clear service agreements must show where each responsibility begins and ends.
Build Shared Data Rules And Consumer Protection
NAICOM should publish the insurtech licensing path, sandbox expectations and conduct rules in plain language.
- Digital insurers need the freedom to test distribution and pricing, but customers must retain clear rights on consent, data use, cancellation, complaints and claims.
Banks, insurers and fintechs should establish controlled ways to reuse identity, payment and credit data.
- Customer permission must be explicit, access should be limited to the stated purpose, and each institution should remain accountable for errors.
- Shared infrastructure should reduce friction without creating a surveillance system around low-income customers.
Product design should start with interviews and transaction patterns in the target community.
- Weekly and daily earners need payment options that reflect their cash flow.
- MSME bundles should name covered assets and events clearly.
- Claims tests should form part of every pilot before large-scale acquisition begins.
The programme should also measure active participation.
- Policy sales, renewals, lapses, claims approval, settlement time and complaint resolution need to appear in a common dashboard.
- Data should be segmented by gender, age, geography and enterprise size so national growth does not conceal persistent exclusion.
Finally, the regulator, industry associations, banks, professional bodies and consumer representatives must share responsibility for public education.
- The message should explain what insurance covers, what it excludes and how to seek redress.
- Greater awareness without better conduct would deepen the trust problem the programme is meant to solve.
Participation Must Outlast Initial Policy Sales
ISSP should judge expansion by active policies, renewals, prompt claims and credible complaints handling.
Digital reach matters only when customers remain protected after the first payment.
Nigeria can use existing banking and identity rails to lower cost, but regulation must preserve consent and accountability.
Simple products, visible claims and standard data should become the programme's first public tests.
