By Tola Ogunnubi
The financial arrangement that makes provisions against potential losses or risks is called Insurance. Insurance is a means of managing uncertainties and all forms of inherent dangers in everyday activities through financial compensation.
In Nigeria, individuals, organisations, and many business owners face financial ruin due to events beyond their control. However, with Insurance, they can maintain stability and continuity of their business in the event of an unexpected occurrence.
In essence, Insurance is the protection, the cover, the shield from total loss, which enables an insured or policyholder to bounce back after a loss.
Insurance is an everyday requirement for all activities, and its importance cannot be overemphasised; it must be deepened.
With the growing Nigerian population estimated to be over 200 million, the country has a vast and active insurance industry contributing significantly to the GDP. But alas, that is not the case.
Nigerians have not fully embraced and appreciated the critical role of Insurance in the country.
The low level of insurance penetration and appreciation, at just 1%, is alarmingly embarrassing for a country like Nigeria.
To address this, the signing into law of the Nigerian Insurance Industry Reform Act, 2025, aka NIIRA 2025, marks a fresh beginning in the practice and administration of Insurance in Nigeria, driven by the country’s potential for growth.
The act, which President Bola Ahmed Tinubu GCFR signed, is a turning point in the risk sector of the Nigerian economy. The new bill will rebuild public trust and attract investment, while also making Insurance a key pillar in national development.
This new act repeals and consolidates the 2023 insurance law, with the NIIRA 2025 act; the present administration’s drive in achieving a $1 trillion economy has further been reassured. The act provides for a comprehensive regulation and supervision of all insurance and reinsurance activities in Nigeria.
Expectedly, the National Insurance Commission (NAICOM) will be administering and enforcing the provisions of the new act by ensuring the following:
A strong capital base for all insurance operators, to boost the financial strength of insurance practitioners.
Ensure prompt settlement of claims and impose fines/sanctions on defaulting underwriters.
Introduction of modern technological and innovative digital access to enhance insurance penetration.
Enforcement of all statutory insurance policies to protect consumers.
A strong presence in regional insurance operations, which will also include the ECOWAS Brown Card System.
Provision of a dedicated fund for the protection of policyholders in instances of insolvency by operators.
In taking this bold move, President Bola Ahmed Tinubu deserves commendation, as does the National Insurance Commission (NAICOM), led by Commissioner for Insurance, Mr Olusegun Ayo Omosehin, a seasoned industry professional. Indeed, it is a new dawn for everybody and the beginning of better things to come.
This is going to be a significant boost in revenue generation for the government, provisions of more jobs and a huge guarantee for businesses to thrive in the economy. Government spending on social safety net programs will reduce significantly. It is now time for the various underwriters to roll up their sleeves and start educating the populace through insurance education dissemination.
*Tola Ogunnubi wrote in from Abuja.
