The Nigerian Council of Registered Insurance Brokers (NCRIB) has again raised the alarm over the country’s persistently low insurance penetration, disclosing that approximately 70 per cent of Nigerians remain without any form of insurance cover. 

Despite a growing economy and a population exceeding 200 million, Nigeria’s insurance penetration rate hovers below one per cent of Gross Domestic Product (GDP). This places the country far behind regional peers such as South Africa, which boasts nearly 12 per cent penetration, and Kenya, which stands at over seven per cent.

The NCRIB has identified several structural barriers perpetuating this gap. Speaking at the 2026 Inaugural Annual Insurance Week at Nnamdi Azikiwe University, Awka, NCRIB President Mrs Ekeoma Ezeibe pointed to the exclusion of pension funds from the insurance sector as a major factor. She noted that before the Pension Reform Act, pensions formed part of the insurance industry and contributed meaningfully to market growth.

Today, those funds are managed separately under the National Pension Commission (PenCom), depriving the sector of billions in potential premium volume.

Another critical factor is the inadequate adoption of technology. While mobile penetration has revolutionised banking in Nigeria, the insurance industry has been slow to ride the digital wave. Many insurers have yet to develop platforms that simplify onboarding, claims processing and payments to the level Nigerians now expect from financial services.

Ezeibe stressed that digital innovation has become a global standard due to its ability to improve efficiency, speed and ease of doing business.

Widespread ignorance about insurance benefits remains perhaps the most pervasive obstacle. Less than three million Nigerians have insurance because the majority lack a proper understanding of what insurance entails and how to engage with it. Many Nigerians still operate on a cash-and-carry basis, unlike the practice in developed economies.

Ezeibe argued that ignorance does not necessarily stem from poverty—even certain wealthy individuals remain largely uninformed. “You hear people say God is their protector. Yes, God does protect. But the same God has given us intelligence for us to apply it towards taking care of ourselves,” she said.

Public mistrust also looms large. For decades, the industry has operated under a cloud of suspicion, seen by many as eager to collect premiums but reluctant to honour claims. Stories of delayed payments, denied claims and bureaucratic frustration have shaped public perception far more than regulatory reforms or industry achievements. This trust deficit, compounded by weak enforcement of compulsory insurance laws covering motor vehicles, buildings and employers’ liability, means insurance remains optional in practice rather than a normal cost of living.

Economic hardship further suppresses demand. With disposable income shrinking, inflation eroding purchasing power and unemployment rising, insurance fundamentally a future good naturally ranks low in household priorities. Many middle-class and low-income earners place insurance last on their checklist, a mindset the NCRIB says must change. Weak credit culture compounds the problem: without credit, insurance struggles; without insurance, credit cannot scale safely.

The NCRIB, however, sees a path forward. It has launched massive advocacy campaigns to improve public awareness and is projecting that insurance penetration could reach three per cent within the next three years, driven by full implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

The regulator, NAICOM, has also begun licensing microinsurance companies to provide coverage for low-income earners, including artisans, farmers, food vendors and petty traders. Industry stakeholders emphasise that collaboration, innovation and sustained public enlightenment are essential to move insurance from the margins to the mainstream of Nigerian financial life.