The Nigerian

Insurance
Industry
The companies, financial sales
associates, and the people

Using losses suffered by businesses in Lagos State during the

events of October 2020 as a case study

Foreword by Babatunde Fajemirokun, FCII, Managing Director & CEO, AIICO Insurance Plc
Intelpoint is the data and research arm of Techpremier Media
(publishers of Techpoint Africa) that offers research consultancy
services to businesses and institutes.

Intelpoint helps investors, businesses, entrepreneurs, and

policymakers make informed decisions by providing in-depth analysis
and reports on various industries. It also offers market research and
analysis as a service to corporate clients.

This report is produced by Techpremier Media and can be used for academic and
commercial purposes with reference to Intelpoint.
 FOREWORD

T
he Nigerian insurance industry, despite its penetration rate and the persistent gap between its
long-standing presence, remains an enigma potential and realisation.
of unfulfilled potential. This report, "The
The preface of this report insightfully points out the
Nigerian Insurance Industry - The companies,
underutilisation of insurance in Nigeria, despite its
financial sales associates, and the people," seeks to
mandatory nature in certain aspects like motor
unravel this mystery by delving deep into the fabric
insurance. This conundrum raises fundamental
of the industry. The report focuses on the events of
questions about the adequacy of fallback plans for
October 2020 in Lagos, a watershed moment that
business owners and the fate of those devoid of
brought to the fore the critical role insurance plays
any safety net. The executive summary further
in mitigating unforeseen calamities and sustaining
paints a picture of an industry at a crossroads. With
economic stability.
penetration levels still languishing below 1%, the
In the aftermath of the #EndSARS protests, the Nigerian insurance sector lags its global
insurance industry in Nigeria emerged not just as a counterparts, despite its sizeable presence in the
financial safeguard, but as a pillar of resilience for African market.
businesses and individuals alike. The claims
This report is not just an exposition of facts and
amounting to approximately ₦9 billion, paid out to
figures; it is a narrative woven from diverse
victims of looting and vandalism, underscored the
perspectives. It brings together insights from key
tangible impact of insurance in times of crisis. Yet,
stakeholders - the business owners who bear the
this responsiveness juxtaposes starkly with the
brunt of unforeseen losses, the insurance sales
industry's lingering challenges: notably, its low
agents who bridge the gap between products and

THE NIGERIAN INSURANCE INDUSTRY 3

 FOREWORD

consumers, and the insurance companies themselves,

whose policies and strategies shape the industry's
trajectory.

The report also explores the role of technology and

innovation in reshaping the insurance landscape,
comparing the dynamic changes in sectors like
banking and how insurance remains relatively
untouched by this digital revolution. The contrasting
approaches of startups like South Africa-based
Pineapple offer a glimpse into alternative models that
could redefine customer trust and penetration in the
African insurance market.

As we navigate through these pages, let us reflect on

the journey of the Nigerian insurance industry, its
current state, and the vast potential it holds. This
report is a call to action for stakeholders to embrace
innovation, build trust, and drive penetration to
unlock the immense potential of the Nigerian
Babatunde Fajemirokun, FCII
insurance market.
Managing Director & CEO,
AIICO Insurance Plc

THE NIGERIAN INSURANCE INDUSTRY 4

 PREFACE

I
nsurance in Nigeria is as old as banking in the that most people shy away from insurance products
country, but its penetration numbers are not and services.
commensurate with its age. For instance, despite
the mandatory minimum third-party insurance cover The primary aim of this report is to portray the
requirement, per the Nigerian Insurers Association, Nigerian insurance industry to interested parties with
less than 30% of vehicles on Nigerian roads were insights and contributions from the industry's major
uninsured as of 2021. stakeholders — business owners, insurance sales
agents, and insurance companies.
The events of October 2020 in Nigeria saw business
owners lose their means of livelihood to theft and Input from these stakeholders allows for the creation
vandalism and presented an opportunity to look at of an industry picture put together with the diverse
the country's insurance market. standpoints.

Do these business owners have backup plans other I sincerely hope that you are fascinated by this
than support from friends and family? If they do, will representation of Nigeria's insurance industry.
these plans be enough for them to bounce back?
What will become of those who have no fallback plan?
These were valid questions that remain important
today, given Nigeria's insurance penetration Yinka Awosanya
numbers.
Research Lead, Intelpoint
Previous conversations with other players in the
industry within and outside Nigeria reiterated the fact

THE NIGERIAN INSURANCE INDUSTRY 5

 CONTENT

About
Foreword Preface Content
Intelpoint
2 3 5 6

Methodology
Executive Industry
Introduction
7 Summary 8 11 Overview 13

The People's Insurance Companies

Industry Story
Trends 20 and their Agents
34
50
THE NIGERIAN INSURANCE INDUSTRY
 METHODOLOGY

T
he information presented in this report was
gotten from publicly available data. All
interviewed business owners run Lagos-based
businesses.

Financial Sales Associates and Insurance Agents

mean the same thing and are used interchangeably in
this report.

Insurance companies surveyed for this report cut

across those with authorisation to offer general,
composite, and family takaful insurance services.

Interview timeline

Lagos-based business owners: 2021

Insurance Agents: 2021

Insurance companies: 2021-2022

THE NIGERIAN INSURANCE INDUSTRY 7

 EXECUTIVE SUMMARY

T
he vision for the Nigerian insurance industry as As of today, there are 610 different types of
stated in the Financial System Strategy 2020 insurance companies in Nigeria, 510 of which are
Plan was to rise to 15th position in the world licensed insurance brokers. Interestingly, the number
insurance premium generation by 2020. The industry of insurance players in the country does not reflect in
was expected to be in its mature market stage its insurance penetration figures.
post-2020 and predicted to hit 15% penetration by
This is despite the presence of third-party motor
2020.
insurance, group life assurance, and six other
However, in 2023, the industry is still in its dormant compulsory covers in Nigeria.
stage with less than 1% penetration. According to
What's more, a report credited to the Nigerian
Atlas Magazine, Nigeria is ranked the 5th insurance
Insurers Association claimed that only about 3.4
market in Africa by turnover in 2021 with 2.1%.
million of the 12 million cars on Nigerian roads were
India occupies the tenth position with only 1.85% of insured as of January 2022.
the global insurance turnover in 2021, whereas
It appears that compulsory insurance covers do not
Africa's share of the global insurance market was
push the insurance penetration needle.
0.96% in 2020, down from 1.07% in 2019. Africa's
figure is small considering its share of the global Technology and startups in the space
population in the same period.
Unlike the banking sector with active participation
This points to the fact that insurance penetration on from Nigerian startups, only a handful of startups
the continent is still low. play in the insurance space, thus leaving it

THE NIGERIAN INSURANCE INDUSTRY 8

 EXECUTIVE SUMMARY

predominantly in the hands of traditional insurance with a relatively different model; insurance
companies. subscribers get paid from unused premiums paid in
the year. This, to some extent, reduces their bottom
The milestones attributable to the activities of line as a business, but it's a great way to build trust in
startups in the banking and payments space prove the insurance market.
how important they are to their respective industries.
Other sectors of the economy that have benefitted According to Forbes Global 2000, the United States
from startups include agriculture, healthcare, and accounted for 6 of the top 20 largest insurance
mobility and logistics. companies in the world in 2021, followed by China
with 3 companies. No African country has an
In 2017, former Minister of Communications, insurance company in the world's top 20.
Adebayo Shittu, revealed that only 1.5 million
Nigerian had an insurance contract. Shittu enjoined Tweaking the traditional model of insurance business
insurance companies to rely on new technologies to might be the way to build trust and increase its
increase the industry's penetration rate. penetration in Africa.

Like traditional banks, insurance companies are riding

on technology to serve their customers better while
increasing their customer base.

Altering the traditional business model

South Africa-based Pineapple is an insurance startup

THE NIGERIAN INSURANCE INDUSTRY 9

 ACKNOWLEDGEMENT

W
e want to thank the following contributors for
giving their time and providing information that
was integral to the successful delivery of the
report.

388 87 27
Business owners Insurance sales Insurance
in Lagos State agents companies

Another set of people facilitated connections with the

insurance agents and business owners we interviewed:

Lagos State Employment Trust Fund

Insurance Nigeria Group

Insurecentric

THE NIGERIAN INSURANCE INDUSTRY 10

 INTRODUCTION

I
nsurance is as old as banking in Nigeria; however, The National Health Insurance Authority (NHIA), the
insurance penetration tells a different story. Royal body established to improve access to quality and
Exchange Assurance Agency, a British insurance affordable healthcare for all Nigerians, released a ten-
company, started operations in Nigeria in 1918 but it year strategic plan (2020-2030) to attain Universal Health
wasn't until 1958 that the first indigenous insurance Coverage through 90% coverage of the populace with
company, African Insurance Company Limited, was health insurance by 2030.
established. Figures for another part of the market, credited to the
Insurance penetration is still less than 1% despite the Nigerian Insurance Industry Database (NIID), say that 3.4
presence of insurance companies in Nigeria before her million of the 12 million registered vehicles in the country
independence in 1960. as of January 2022 had at least a third-party insurance
The concept of insurance as a backup plan is one that is cover.
not entrenched in the Nigerian culture or system. The It is no longer news that Nigerians are averse to picking
support system in the event of business or personal loss up insurance cover for their businesses, property, or
is always friends and family — the community. lives.
To a large extent, people still rely on the community as a As of 2020, the African insurance market only accounted
form of support in the event of loss, with seven in every for 0.96% of the global insurance market. Clearly, the
ten business owners without insurance coverage seeing continent's insurance market is not reflective of its
their friends and family as their backup plans. population — 15% of the world's eight billion people.
The story is no different with healthcare insurance. As of In the same vein, Nigeria is not leading the African
2020, only 5% of Nigerians had a form of health insurance market by turnover: it has the 5th largest
insurance. Interestingly, the first first Health Maintenance turnover in 2021 on the continent after South Africa,
Organization (HMO), Total Health Trust, was Morocco, Egypt, and Kenya, in that order.
incorporated in 1996.

THE NIGERIAN INSURANCE INDUSTRY 11

 INTRODUCTION

The vision for the insurance industry as stated in the education levels somewhat play a role in whether people
Financial System Strategy 2020 is to attain the 15th subscribe to an insurance product.
position in the world insurance premium generation by Many people without insurance cover for their business
2020 and hit a 15% penetration afterwards. A couple of claim they do not know where to start, further
years after the target and Nigeria is nowhere near the buttressing the fact that education has a major impact on
top, with the African market contributing less than 1% to insurance penetration.
the global market as of the end of the strategy's timeline.
Beyond education, age also appears to sway decision as
As it is, the industry is still in its dormant stage with there are more older business owners with insurance
penetration around 1%. The compulsory eight insurance cover than younger ones.
covers in the country are not making any impact on
People with no insurance cover for their businesses have
insurance penetration.
backup plans in their friends and family, while others use
The National Bureau of Statistics in partnership with the periodic contribution (ajo, esusu, etc) and cooperative
World Bank conducted a survey and interviewed 5,000 societies, among others.
households and 14,800 adults across Nigeria between
One of insurance sales agents' main pain points is the
2010 and 2013. One of the findings of the exercise was
inability to meet their periodic sales quotas. They also
that only 3% of households report having any sort of
believe that lack of trust in the insurance system is one of
insurance, such as health, life, or property.
the primary reasons for its low penetration; this view is
Three hundred and eighty-eight (388) business owners also shared by representatives of the insurance
that suffered losses during the events of October 2020 companies interviewed.
were interviewed for this report. However, only 3.6% of
This means that players in the insurance industry need to
them have insurance cover for their businesses.
invest in educating their market and the people selling
Interestingly, a larger percentage of those with insurance
their products and services.
cover have at least a bachelor's degree. Evidently,

THE NIGERIAN INSURANCE INDUSTRY 12

 INDUSTRY
OVERVIEW

THE NIGERIAN INSURANCE INDUSTRY 13

 THE INDUSTRY

Key figures

3.4m
₦2.3 trillion ₦2.2 trillion of the 12 million cars on
Nigerian insurance Nigerian insurance Nigerian roads are insured
₦726.2 market as of 2022 market size as of 2021
(Industry’s total
according to the Nigerian
Insurance Association (NIA)
billion (Industry’s total
assets) assets)
The industry’s Gross
Premium Income in 2022

₦551.4b
in the first half
of 2023 alone

2.13% 3.1m 0.32%

Nigeria accounted for Insurance customers as of Insurance’s contribution
2.13% of Africa's insurance 2021 to GDP in 2022
turnover in 2021

THE NIGERIAN INSURANCE INDUSTRY 14

 THE INDUSTRY

Industry players

12 27 13 4
composite insurance general insurance life insurance general and family
companies companies companies takaful companies

3 510 36 8
re-insurance licensed loss adjuster microinsurance
companies insurance brokers companies companies

THE NIGERIAN INSURANCE INDUSTRY 15

 THE INDUSTRY
Top 10 insurance companies in Nigeria in 2022
by turnover (gross premium)

Leadway Insurance ₦92.53b

AIICO Insurance ₦88.28b

AXA Mansard Insurance ₦68.98b

Custodian and Allied Insurance ₦37.98b

Mutual Benefits Insurance ₦33.48b

NEM Insurance ₦33.37b

Cornerstone Insurance ₦22.25b

Coronation Insurance ₦19.84b

Sovereign Trust Insurance ₦15.23b

Lasaco Insurance ₦13.91b

THE NIGERIAN INSURANCE INDUSTRY 16

 THE INDUSTRY
Top 10 insurance companies in Nigeria by total
assets as of 2022

Leadway Insurance ₦536b

AIICO Insurance ₦270.30b

AXA Mansard Insurance ₦106.2b

Mutual Benefits Insurance ₦92.95b

Custodian and Allied Insurance ₦58.9b

Cornerstone Insurance ₦50.39b

NEM Insurance ₦45.89b

Linkage Assurance ₦39.997b

Coronation Insurance ₦37.7b

Lasaco Insurance ₦21.1b

THE NIGERIAN INSURANCE INDUSTRY 17

 THE INDUSTRY
According to Enhancing Financial Innovation & Access
(EFInA) Access to Financial Services in Nigeria 2020 Survey

619k 7/10
adults have 7 in 10 insured adults
microinsurance are males
2.1m
million adults have
insurance

88% 1/2
88% of insured adults have 1 in 2 insured adults works
a secondary education in the formal sector

THE NIGERIAN INSURANCE INDUSTRY 18

 THE INDUSTRY

Compulsory insurance covers in Nigeria

Employer's Workmen's
Third-party liability compensation Group life Healthcare professional
motor insurance insurance insurance assurance indemnity insurance

Aviation third- Occupiers' liability Builders’ liability insurance

party insurance Marine insurance insurance (insurance of (insurance of buildings
public buildings) under construction)

Pencom Act 2004

Pension Reform Act of 2014

Some regulations
in Nigeria’s Employee's Compensation Act 2010

insurance industry The Insurance Act 2003

National Insurance Commission Act 1997

National Health Insurance Scheme (NHIS) Act 1999

THE NIGERIAN INSURANCE INDUSTRY 19

 INDUSTRY
TRENDS

THE NIGERIAN INSURANCE INDUSTRY 20

 INDUSTRY TRENDS

Nigerian insurance industry in the last 13 years

I
n the past 13 years, only life business didn't Each class of business recorded an increase in gross
record a negative percentage change in its premium in 2021. The gross premium for the
gross premiums, with 2.2% in 2020 its least industry also recorded its highest year-on-year
year-on-year percentage. Life business also had the percentage change in the same year.
highest average percentage change in gross
For non-life business class, Oil & Gas has been the
premium over the past year. Its gross premium's
major contributor since 2014. Motor class led the
average growth rate is also higher than any other
pack between 2010 and 2013.
class of business in the industry.

Life business has been the major contributor to the

industry's gross premium since 2010, accounting
for not less than 30% each year between 2014 and
2022. Life business’ gross premium share peaked in
2020 with 45.06% of the industry's figure.

The breakdown of gross premium for life business

in 2022 shows that individual life was the biggest
driver, followed by group life.

THE NIGERIAN INSURANCE INDUSTRY 21

 INDUSTRY TRENDS

Insurance premiums over the years

₦726.40b

₦631.42b

Total premium

₦514.59b
Non-life insurance
₦508.23b

Life insurance ₦426.21b

₦417.30b
₦372.36b ₦365.80b

₦326.11b
₦289.34b ₦309.10b
₦276.97b ₦281.84b ₦281.35b ₦282.71b ₦265.62b
₦258.40b
₦245.41b
₦233.75b ₦231.88b
₦219.80b ₦226.88b
₦200.38b ₦196.45b ₦198.39b ₦201.55b
₦193.49b ₦195.89b ₦180.80b
₦175.76b
₦157.34b ₦152.56b
₦124.57b
₦90.95b
₦80.52b ₦85.95b
₦64.91b
₦58.00b
₦43.04b

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

THE NIGERIAN INSURANCE INDUSTRY 22

 INDUSTRY TRENDS
Gross premiums and gross claims paid over the years
by the insurance sector

₦726.40b

₦631.42b

Industry’s gross premiums

Gross claims paid ₦514.59b

₦508.23b

₦426.21b

₦372.36b

₦326.11b ₦336.80b
₦318.20b
₦281.84b ₦289.34b
₦276.97b
₦258.40b ₦252.19b ₦247.23b
₦233.75b
₦225.17b
₦200.38b
₦186.45b

₦145.84b
₦107.30b ₦111.17b
₦99.16b
₦79.12b
₦53.82b ₦47.61b

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

THE NIGERIAN INSURANCE INDUSTRY 23

 INDUSTRY TRENDS
Average share of insurance gross premiums by each class
of business between 2010 and 2022
35.26%

18.39%

14.26%

10.80%
9.13%
6.94%
5.12%

0.29%

Life Oil & Gas Motor Fire General Marine & Misc. W/comp
Accident Aviation

THE NIGERIAN INSURANCE INDUSTRY 24

 INDUSTRY TRENDS

Share of gross premiums of life business in 2022

27%
Annuity

39%
Individual

34%
Group Life

THE NIGERIAN INSURANCE INDUSTRY 25

 INDUSTRY TRENDS

Cumulative gross premiums over the years

Share of cumulative gross Share of cumulative gross

premiums by all business premiums by all non-life classes
classes over the years of business over the years

5.3% 0.1% 8.5% 0.1%

6.7% Misc W/comp W/comp
Misc
Marine &
Aviation
10.8%
Marine &
8.3% Aviation 29.6%
General Oil & Gas
Accident 37.9%
Life

10.9% 13.3%
Fire General
Accident

12.5% 20.2%
Motor 17.5% Motor
Fire
18.4%
Oil & Gas

THE NIGERIAN INSURANCE INDUSTRY 26

 INDUSTRY TRENDS
Share of gross premiums by non-life classes
of business over the years
2010 15.41% 17.68% 27.92% 0.91% 13.52% 19.39% 5.17%

2011 14.22% 17.47% 25.84% 0.57% 12.84% 21.22% 7.84%

2012 13.35% 17.40% 28.43% 0.07% 13.48% 23.29% 3.98%

0.15%
2013 11.48% 12.06% 33.95% 7.50% 28.72% 6.15%
0.21%
2014 17.03% 14.14% 21.53% 9.36% 29.71% 8.01%

2015 15.99% 14.67% 20.31% 8.36% 33.23% 7.45%

2016 18.98% 14.82% 20.55% 8.19% 28.02% 9.43%

2017 18.85% 12.59% 20.51% 7.70% 30.72% 9.63%

2018 18.35% 11.73% 16.36% 10.79% 33.51% 9.26%

2019 18.83% 12.40% 15.60% 9.93% 33.66% 9.59%

2020 16.94% 12.94% 16.81% 11.71% 32.50% 9.10%

2021 18.62% 11.23% 15.66% 12.94% 31.28% 10.27%

2022 22.19% 11.05% 14.91% 12.22% 30.12% 9.51%

0% 25% 50% 75% 100%

Fire General Accident Motor W/comp Marine & Aviation Oil & Gas Misc.

THE NIGERIAN INSURANCE INDUSTRY 27

 INDUSTRY TRENDS
Market size (assets) of the Nigerian insurance
industry over the years

₦2.33tr
₦2.22tr

₦2.05tr

₦1.53tr

₦1.33tr

₦1.13tr
₦1.02tr
₦0.92tr
₦0.83tr
₦0.79tr
₦0.71tr
₦0.62tr
₦0.59tr

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

THE NIGERIAN INSURANCE INDUSTRY 28

 INDUSTRY TRENDS

Insurance premiums over the years

₦631.4b
Non-life Insurance

Life Insurance ₦514.6b

₦508.2b

Total N
₦426.2b

₦372.4b
₦371.8b
₦326.1b

₦281.8b ₦289.3b ₦282.7b

₦276.5b ₦281.3b
₦258.4b ₦245.4b ₦265.6b
₦233.8b ₦219.8b ₦231.9b
₦201.5b ₦226.9b
₦196.0b ₦195.9b ₦198.4b
₦193.5b ₦180.8b
₦175.8b
₦152.6b
₦124.6b
₦86.0b ₦91.0b
₦80.5b
₦64.9b
₦58.0b

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THE NIGERIAN INSURANCE INDUSTRY 29

 INDUSTRY TRENDS
Gross premiums and gross claims paid
over the years by the insurance sector

₦616.6b

₦514.6b
₦508.2b
Gross claims paid
₦426.2b
Insurance premiums
₦372.4b

₦326.1b ₦336.8b
₦281.8b ₦289.3b
₦276.5b
₦258.4b ₦252.2b ₦247.2b
₦233.8b ₦225.2b
₦186.4b
₦145.8b
₦111.2b
₦107.3b ₦99.2b
₦79.1b
₦47.6b

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

THE NIGERIAN INSURANCE INDUSTRY 30

 INDUSTRY TRENDS
Insurance’s contribution to Nigeria’s Gross Domestic
product over the years

0.49%
0.47%
0.45% 0.44%

0.40%
0.39% 0.39%
0.37%

0.34%
0.33%
0.31% 0.32% 0.32%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

THE NIGERIAN INSURANCE INDUSTRY 31

 INDUSTRY TRENDS

Nigeria vs the top three most populous developing countries

in the world with less than a billion people and the top three
most populous African countries

Indonesia Pakistan Nigeria Brazil Ethiopia Egypt DR Congo

Population (2022) 275.5m 234.8m 218.5m 215.3m 123.4m 111m 99m

GDP per capita

$4,788 $1,596.66 $2,184.42 $8,917.67 $1,027.59 $4,295.41 $586.46
(current US$) 2022

Insurance
0.41% 0.91% 0.34% 4.11% 0.16% 0.75% 0.41%
Penetration (2021)

Gross Premium
$4.9b $2.42b $1.5b $66.2b $179.1m $3.02b $221m
Income (2021)
Life insurance
share of gross 67.6% 42.39% 47.90% 50.53%
premium (2021)
Rp Rs ₦ R$ Birr £ FrCD
Insurance density
253,022 2,084 2,916.75 1,723.78 75.93 454.99 4,766.91

Insurance density
$17.73 $11.69 $7.09 $309.35 $1.52 $28.97 $2.39
(in $)

THE NIGERIAN INSURANCE INDUSTRY 32

 INDUSTRY TRENDS

Share of Africa’s insurance market in 2021

South Africa 69.03%

Morocco 7.20%

Egypt 3.79%

Kenya 3.26%

Nigeria 2.13%

Algeria 1.45%

Tunisia 1.33%

Namibia 1.17%

Cote d’Ivoire 1.14%

Ghana 1.10%

Rest of Africa 8.40%

THE NIGERIAN INSURANCE INDUSTRY 33

 THE
PEOPLE’S
STORY

THE NIGERIAN INSURANCE INDUSTRY 34

 THE PEOPLE’S STORY

Highlights

Insights from the business owners in Lagos

State that lost their means of livelihood
during the events of October 2020. 388
business owners

"I don't know where to start" tops

More than half of the affected the list of reasons people don't have
SMEs have a staff strength of 1,693+ staff strength of insurance coverage for their
2 to 4 employees affected surveyed businesses businesses

Only 13.1% of people with no

7 in every 10 businesses
Only 3.6% of surveyed business insurance coverage for their business
surveyed laid off some
owners have insurance coverage for have other backup plans in case of
employees after the events of
their businesses fire or theft
October 2020
THE NIGERIAN INSURANCE INDUSTRY 35
 THE PEOPLE’S STORY

Demographic

Age range Gender

18-20 1.03%

21-30 35.82%

31-40 43.04%

41-50 13.66%

Above 50 6.44%

Only 3 in 10 of the affected business

owners are female
THE NIGERIAN INSURANCE INDUSTRY 36
 THE PEOPLE’S STORY

Demographic

Marital Status
Share of business owners
52.06%
by highest educational Separated (1.8%)
Divorced (0.3%)
qualification
33.51%
Single
33.2%

13.14% Married
64.7%
1.03%
0.26%

No Formal Primary Secondary Bachelor’s Postgraduate

Education Education Education Degree Degree

THE NIGERIAN INSURANCE INDUSTRY 37

 THE PEOPLE’S STORY

Years in operation and staff strength

Share of businesses by Share of businesses by

number of years in operation staff strength
56.96%
45.1%
Share of business

Share of business
19.6% 18.6%
16.5%
17.01% 16.75%

9.28%

0-2 years 2-5 years 6-10 years Over 10 years 0-1 2-4 5-7 Over 8
employee employees employees employees

61.6% of the businesses have been in operation between

zero to five years while only 18.6% of the SMEs have been
in business for over a decade.

THE NIGERIAN INSURANCE INDUSTRY 38

 THE PEOPLE’S STORY

The kind of businesses affected

Fashion & Beauty

Agriculture
Food & Beverages

Retail Trading

ICT
Services
Transportation

Entertainment
Building & Construction

Education

Health Services

Online Retail
Real Estate
Consulting

Engineering Services

Hotel and Leisure

Manufacturing

Travel/Tourism

THE NIGERIAN INSURANCE INDUSTRY 39

 THE PEOPLE’S STORY

Their businesses: losses and layoff

Share of businesses by estimated

losses incurred

30.93% DLO
29.38% 29.64%
30.2%
Share of business

10.05%
LO
69.8%
Below ₦250,001- ₦500,001- Above
₦250,000 ₦500,000 ₦1,000,000 ₦1,000,000

60% of surveyed business owners claimed to Share of business that laid off some staff
have lost more than half a million naira. after the events of October 2020
LO: Laid off; DLO: Didn't lay off

THE NIGERIAN INSURANCE INDUSTRY 40

 THE PEOPLE’S STORY

Insurance coverage

Share of the victims who have Top reasons people don't have
insurance cover for their insurance coverage for their
businesses business

I do not know
where to start 30.17%

Insurance products
are too expensive 26.65%

Have Insurance sales agents

don’t come around 18.18%
3.6% Don’t have 96.4%
I don’t see the
importance of 10.33%
insurance services

Insurance products
are deceptive and 4.96%
do not offer any value

THE NIGERIAN INSURANCE INDUSTRY 41

 THE PEOPLE’S STORY

Religious beliefs and insurance subscription

Christianity 94.9% 5.1%

Islam 98.2% 1.8%

None 100.0%

African
Traditional 100.0%
Religion

Have no insurance cover Have insurance cover

5% of the surveyed business owners that are Christians have insurance coverage for their
business while only 1.7% of the Muslims have insurance coverage.
56.1% of all business owners are christian and 43.3% are muslim while African Traditionalist
and those without a religion each accounted for only 0.3%.

THE NIGERIAN INSURANCE INDUSTRY 42

 THE PEOPLE’S STORY

Highest education level of business

owners and insurance coverage status

No Formal Education 100%

Primary Education 100%

Secondary Education
(SSCE/WAEC Completion) 1.5% 98.5%

Bachelor’s Degree 3.0% 97%

Postgraduate Degree 11.8% 88.2%

Have insurance cover Have no insurance cover

It appears the education level of business owners plays a role in whether they get insurance
coverage for their business or not. None of the surveyed businesses with no formal education or
primary education has insurance coverage for their businesses while those with secondary
education and above have insurance coverage for their businesses.

THE NIGERIAN INSURANCE INDUSTRY 43

 THE PEOPLE’S STORY

Age range of business owners and insurance coverage

163

138

Has no insurance
Has insurance

47

22
4 1 4 6 3
18-20 21-30 31-40 41-50 Above 50

Business owners above 40 are more likely to get insurance coverage for their business than those below 40. Unlike people's
education level, age range, and religious beliefs which all have an impact on them getting insurance for their businesses,
there's no correlation between where people live, their marital status, or business type and having insurance coverage for
their business.
THE NIGERIAN INSURANCE INDUSTRY 44
 THE PEOPLE’S STORY

Breakdown of business owners’ gender

by insurance subscription

Have insurance 31.3% 68.7%

Have no insurance 21.4% 78.6%

Female Male

THE NIGERIAN INSURANCE INDUSTRY 45

 THE PEOPLE’S STORY

Share of gender by insurance subscription

Share of male business Share of female business

owners with insurance owners with insurance
coverage coverage
4.1% 2.5%

95.9% 97.5%

Have insurance
Have no insurance

THE NIGERIAN INSURANCE INDUSTRY 46

 THE PEOPLE’S STORY

Businesses and insurance agents

Do insurance agents approach Are business owners being

people with no insurance coverage approached by insurance agents
for their businesses? getting adequate information about
insurance products/services?

23.3%

Yes
Maybe Yes
5.9% 41.7% 58.3%
70.8% No No

7 in 10 of those with no insurance coverage for their A larger share of business owners approached by insurance
businesses have never been approached by an agents get the right information about insurance. It, therefore,
insurance agent. This aligns with two of the top reasons follows that an increase in the number of these agents will have
people don't have coverage: not knowing where to a great effect on people's perception about the importance of
start and the agents not coming around. insurance for their businesses.
THE NIGERIAN INSURANCE INDUSTRY 47
 THE PEOPLE’S STORY

Backup plans for these businesses

LSETF
5.9%
Loan

Ajo
5.9%
(Periodic contribution)

Yes 5.9%
13.1%
Co-operative
Society
11.7%

Family/Friends
70.6%

No
86.9% Types of backup plans people
Do people without insurance without insurance cover for their
coverage for their businesses businesses have in place.
have backup plans?

THE NIGERIAN INSURANCE INDUSTRY 48

 THE PEOPLE’S STORY

Some comments from the business owners

…the Insurance claim paid “My bus

could not cover all our iness wa
the riots s no
losses. due to a t insured before “Didn’t thi
that has n act of insura nk
now bee om
n rectifie ission, nce fo I needed
e are now da r cloth
of fa ke insuranc insured.” nd we es”
sc a red on 't
“I'm eId
y becaus
that's wh ho is who!” “I had the intention of
know w
"I will take insurance more doing the insurance, this
“In transportation we only obtained seriously now. Pharmaceutical year since I just started my
third party insurance and compressive Society is making insurance store in December 2019”
insurance is somehow expensive” compulsory now for us to renew
our license."
"Process an "Friendly insurance models
d procedure
insurance cl s for for growing businesses
aims are co
with the vie mplicated, "Why I did not really go for should be made available to
w of denyin
his paymen g the insure
t or claims." d insurance was because of the entrepreneurs"
pandemic but hopefully if my
business balance fully I will definitely
r vehicle insure my business..." "Insurance
"I have moto y co
I don't think m Nigeria are mpanies in
insurance but r not worth
enough fo it."
business is big
rage." "I want an affordable insurance policy"
insurance cove

THE NIGERIAN INSURANCE INDUSTRY 49

 INSURANCE
COMPANIES
AND THEIR
AGENTS

THE NIGERIAN INSURANCE INDUSTRY 50

 INSURANCE COMPANIES AND THEIR AGENTS

Highlights

85.2% of the insurance companies said it takes a

couple of working days to file an insurance claim with
87
them, which is paid within a month of being filed. insurance agents were
interviewed

27 1 1
27 insurance companies 1 in every 2 financial sales Only one of the interviewed
were interviewed associates is aged 31-40 companies doesn't train its
agents after hiring

7 2
7 in every 10 financial
2 in every 10 businesses
sales assocaites spend
don't know how to make
over two years in the
insurance claims
industry
THE NIGERIAN INSURANCE INDUSTRY 51
 INSURANCE COMPANIES AND THEIR AGENTS

Demography of financial sales assocaites

Gender breakdown

52.87%

21.84%
18.39%

6.9%

21-30 31-40 41-50 Above 50

Share of financial sales associates by age range

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 INSURANCE COMPANIES AND THEIR AGENTS

Education level of financial sales associates

3.5%
SSCE/WAEC
21.8%
Postgraduate
Degree SSCE/WAEC
22.2%

74.7%
Bachelor’s
Degree 77.8% Bachelor’s
Degree

Highest level of education of The lowest academic qualification to

interviewed agents become an agent, according to the
interviewed insurance companies

Only 3 of the 87 interviewed insurance agents have secondary school as their

highest level of education while 6 of the 27 companies employ people with only a
secondary school education.
THE NIGERIAN INSURANCE INDUSTRY 53
 INSURANCE COMPANIES AND THEIR AGENTS

Training for financial sales associates

Did these agents get
some initial training Was the initial training
instructive enough?
4.6%
No

83.1% 16.9%

Yes No
95.4%
Yes

Insurance companies’ side of the training

Did companies arrange any Did companies retrain people with Did these companies offer regular
training for their agents previous insurance sales experience retraining exercises for their agents
No No No
3.7% 7.4% 3.7%

Yes Yes Yes

96.3% 92.6% 96.3%

THE NIGERIAN INSURANCE INDUSTRY 54

 INSURANCE COMPANIES AND THEIR AGENTS

Some interesting comments about the

training for financial sales associates
"Insurance companies should
take more time in teaching the
"They (insurance companies) are
be more insurance products to agents
"Needs to eoretical." just in for the money. Nothing before expecting them to sell the
than th more or nothing less."
practical service in order to avoid
misrepresentation and legal
issues that may arise during the
"It really helped shape me into a very effective and course of the job."
experienced insurance salesperson, also I use to have
"Specifi
a weird and bad impression of insurance before c
"It [the prior training] Insuran to the type o
joining the insurance sector but the training I have ce to b f
basically just brushed e sold."
received has really changed my perception of "Training should be
insurance in Nigeria, how it works and how the the surface." done every 3 months."
regulatory bodies have really helped insurance to
regain back its trust in the minds of Nigerians."
"it was very well insightful, with
knowledge about
different financial services/produc
ts that has been
"Very insightful and knowledge packed I have to tailored or designed enough to
educate and help the
indebt knowledge about insurance products I know masses on risk management and
also prepare them
how it works and how to advise my prospect on against future uncertainties."
which package to go for."

with the
to prepare you "Very insightful as it changed
"The training is d to be come an
"It gave me the needed knowledge ills require my perception on Insurance."
potential and sk t."
and information required to start up insurance agen
as a financial advisor."

THE NIGERIAN INSURANCE INDUSTRY 55

 INSURANCE COMPANIES AND THEIR AGENTS

Remuneration

Share of agents by the Share of remuneration type offered

types of remuneration by companies to their agents

Salary + Only
Commission on Sales commissions

27.6% 22.2%
Only
commissions
70.1%

Only Salary +
salaries Commission on Sales
2.3% 77.8%

There's a sharp contrast between the type of compensation that insurance

companies pay their agents and what the agents claim they receive.

THE NIGERIAN INSURANCE INDUSTRY 56

 INSURANCE COMPANIES AND THEIR AGENTS

Take-home pay

Monthly take-home Share of agents' monthly take-

pay according to home pay according to the
insurance agents companies

Less than ₦30,000 20.7%

0.0%

₦30,001 - ₦60,000 32.2% 48.2%

₦60,001 - ₦90,000 9.2% 22.2%

₦90,001 - ₦120,000 14.9% 7.4%

₦120,001 - ₦150,000 6.9% 7.4%

Above ₦150,000 16.1% 14.8%

THE NIGERIAN INSURANCE INDUSTRY 57

 INSURANCE COMPANIES AND THEIR AGENTS

Other benefits for financial sales associates

Transport
Allowance
Health
Insurance

Bonuses

Group Life
Insurance
No other
benefits

Pension

Internet
Allowance

Telephone
Allowance

Other benefits

THE NIGERIAN INSURANCE INDUSTRY 58

 INSURANCE COMPANIES AND THEIR AGENTS

Financial sales associates' average monthly

remuneration and their positions on its fairness

Below
5.5% 77.8% 16.7%
₦30,000

₦30,001- Commensurate
10.7% 75.0% 14.3% with the workload
₦60,000

₦60,001- Not Commensurate

25.0% 75.0% with the workload
₦90,000
Maybe it’s
₦90,001- Commensurate
69.3% 30.7%
₦120,000

₦120,001-
16.7% 66.6% 16.7%
₦150,000

Above 57.1%
28.6% 14.3%
₦150,000

56.5% of financial sales associates who think their average monthly income is not commensurate
with their workload earn less than ₦60,001. Also, the largest share of those earning above
₦150,000 believe they should be earning more, considering that 64% of them sell more than 10
insurance products in any given month compared to those earning less than ₦150,000.

Evidently, remuneration plays a role in agents' commitment to sell more.

THE NIGERIAN INSURANCE INDUSTRY 59
 INSURANCE COMPANIES AND THEIR AGENTS

Sales agents' salary range by remuneration type

Below
₦30,000 83.3% 16.7%

₦30,001-
₦60,000 75.0% 25.0%

Only commissions
₦60,001-
₦90,000 62.5% 37.5%
Salaries +
Commissions
₦90,001-
₦120,000 46.2% 46.2% 7.6%
Only salaries

₦120,001-
₦150,000 100.0%

Above
₦150,000 57.1% 35.8% 7.1%

More than half of interviewed agents earn less than ₦60,001 and 3 in every 4 agents who
earn less than ₦60,001 get only commissions on sales as a form of remuneration.

THE NIGERIAN INSURANCE INDUSTRY 60

 INSURANCE COMPANIES AND THEIR AGENTS

The relationship between remuneration type and the number

of businesses that agents engage with in any given week

1-10 72.7% 27.3%

Number of businesses

Only commissions

11-20 65.2% 30.4% 4.4% Salaries +

Commissions

Only salaries
More than 21 66.7% 22.2% 11.1%

The relationship between remuneration type and how many

insurance products agents sell in a given month

1-10 66.7% 31.8% 1.5%

Number of businesses

Only commissions

11-20 81.2% 18.8%

Salaries +
Commissions
21-30 100.0%
Only salaries
Above 50 50.0% 50.0%

THE NIGERIAN INSURANCE INDUSTRY 61

 INSURANCE COMPANIES AND THEIR AGENTS

Breakdown of agents by remuneration and how long

they’ve worked in the insurance space

Below 6 months 75.0% 25.0%

7 months to 1 year 50.0% 50.0% Only commissions

Salaries +
Commissions
13 months to 2 years 100.0%
Only salaries

Above 2 years 68.8% 28.1% 3.1%

Eighty-five per cent (85%) of agents earning only commissions are still working in
the insurance industry. In general, 3 in every 4 agents who are still in the insurance
industry are earning only commissions.

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 INSURANCE COMPANIES AND THEIR AGENTS

Breakdown of the number of insurance products that agents

sell in a given month based on their educational qualifications

1-10 3.03% 74.24% 22.73%

11-20 6.25% 87.5% 6.25% WAEC/SSCE

Bachelor’s Degree

21-30 33.33% 66.67%

Postgraduate Degree

Above 50 50% 50%

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 INSURANCE COMPANIES AND THEIR AGENTS

Financial sales associates’ challenges

Share of why people spend Insurance companies'

less than two years as perception of financial sales
financial sales associates associates' challenges
3.7%

14.8% Working conditions

The salary
was poor 33.33% Other concerns

I couldn’t meet
my periodic 27.28%
sales targets

I got a better
job offer 22.22%
22.2% 59.3%
Remuneration
Meeting periodic
Unhealthy working sales quotas
environment 16.67%

Only 3 in every 10 financial sales associates who spend less than two years in the
industry cite low remuneration as their reason for leaving. Most people who have
worked as insurance agents are unlikely to work in the industry again.

THE NIGERIAN INSURANCE INDUSTRY 64

 INSURANCE COMPANIES AND THEIR AGENTS

Share of companies that give their agents sales targets

3.7%
Don’t give
96.3%
Give

Many agents consider meeting their

sales targets a major challenge.

THE NIGERIAN INSURANCE INDUSTRY 65

 INSURANCE COMPANIES AND THEIR AGENTS

Insurance agents’ tenure and others

Share of how long agents have Likelihood of financial sales

worked in the insurance industry associates returning
9.2%
Less than 6 months
20.0%
Most likely
9.2%
7 months to 1 year

8.0% 50.0%
13 months to 2 years Unlikely

30.0%
73.6% Less likely
More than 2 years

Poor remuneration tops the reasons financial sales associates spend little
time in the industry. Other reasons include unhealthy working
environments and failure to meet periodic sales targets.

THE NIGERIAN INSURANCE INDUSTRY 66

 INSURANCE COMPANIES AND THEIR AGENTS

Some reasons ex-insurance agents might not return to

the industry

is
F job without salary
insu inancia It’s su ff erin g . A s and
ranc l m m issions on sale Very stressful and
e sh Adviso ridiculous . O nly co
w. Like a
ould r in ns were very lo emotional
sala
ry to be pai the commissio on th e p re m ium
centage
o. da fraction of a per
being paid. Gotten a job that wi
ll
ensure regular
income
Life Insurance business appear to be
rejection market except in cases where it is Nigeria ne
govt mandated . It can be interesting if ed to make
people see laws that w
need to bu ill make
people give are made to have life its still not y insurance
insurance as a compulsion in Nigeria . I a job I'll go if not
back to.
would be happy to sell insurance to who is
open to learn and buy .
With the few years of experience i
have coupled with the fact that i
No fix salary, your income depends on studied Insurance in School, a more
your performance The commission is technical role wouldn't be bad
relatively inadequate for my expenses

THE NIGERIAN INSURANCE INDUSTRY 67

 INSURANCE COMPANIES AND THEIR AGENTS

The biggest challenges with selling insurance products

According to financial According to insurance

sales associates companies

Lack of trust in the system 51.7% 37.0%

Lack of awareness about 29.2% 51.9%

insurance products

Non-acceptance of 16.9% 11.1%

insurance products

Lack of demand on the part of

2.2% 0.0%
the business owners

There are inconsistencies between what the financial sales associates claim is their biggest
challenge and the feedback insurance companies claim to have gotten from them. Twenty-four (24)
insurance companies claim to pay claims promptly to increase trust in the insurance market.

THE NIGERIAN INSURANCE INDUSTRY 68

 INSURANCE COMPANIES AND THEIR AGENTS

Business owner and the promise of insurance

Reasons business owners don’t buy insurance Do insurance sales agents overpromise to sell
according to insurance agents insurance products?
Lack of trust in the
insurance companies to
come through when 39.63%
needed

They don’t see insurance

as something important 33.54%
for their business

Religious beliefs (“Blood

of Jesus,” “Under the 19.51% Yes No
protection of Allah”)

13.1% 83.9%
Insurance products and
services are expensive 6.71%
There appears to be no link between the insurance agents and the lack of trust in the
insurance industry considering that only 83.9% of the interviewed agents claimed
Procrastination 0.61% that they don't overpromise while trying to sell an insurance product or service.

"I don't know where to start" tops the reasons businesses gave for not subscribing
to insurance products/services. All the interviewed companies train and retrain their
agents as part of the ways to address this except for six companies. Some
companies that train and retrain their agents also do social media and physical
marketing campaigns targeted at micro, small, and medium enterprises.

THE NIGERIAN INSURANCE INDUSTRY 69

 INSURANCE COMPANIES AND THEIR AGENTS

Marketing campaign for insurance products

How often do insurance companies Share of insurance companies by the

engage in marketing campaigns? number of marketing campaign
channels they always use
3.7%
7.4% Rarely
Monthly
One 29.63%
7.4%

Campaign count
Annually

63.0%
There’s always a Two 14.81%
campaign running

18.5%
Quarterly
Three
55.56%
and above

Share of company

Lack of awareness is the common factor between the biggest challenge to advisers in selling insurance
products and the major concern for the businesses purchasing the products. That a large percentage of the
interviewed insurance companies always engage in one form of marketing campaign or the other denotes a
disparity between these campaigns and the businesses that the agents are engaging.
THE NIGERIAN INSURANCE INDUSTRY 70
 INSURANCE COMPANIES AND THEIR AGENTS

The easiest insurance product to sell according to

financial sales associates

Auto Insurance
(Motor Insurance)

Savings
Products/Services

The first part of section three of the Motor Vehicles (Third Party Insurance)
Act states that "Subject to the provisions of this Act no person shall use, or
Life Assurance cause or permit any other person to use a motor vehicle unless there is in
force in relation to the user of that motor vehicle by such person or such
other person as the case may be such a policy of insurance or such a security
Business Cover in respect of third party risks as complies with the provisions of this Act."
(Fire, Theft, etc)
This explains why motor vehicle is the easiest product to sell.

Most interviewed agents claimed that insurance products are difficult to

Healthcare sell. On the part of the insurance companies, they are training and
retraining the advisers and doing campaigns about the importance of
insurance services to businesses.

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 INSURANCE COMPANIES AND THEIR AGENTS

Estimated premiums by estimated losses

Share of the insurance companies Breakdown of the annual premiums that interviewed
by the premiums they charge businesses would have paid — based on their
small and microbusinesses estimated losses — if they had insurance coverage.

7.4% Estimated Premium Rate Premium Rate Premium Rate

5.1% - 7.5% Loss (Lowest range) (Mid range) (Highest range)
0.1% - 2.5% 2.51% - 5% 5.01% - 7.5%

Below
₦250,000 ₦250 - ₦6,250 ₦6,275 - ₦12,500 ₦12,525 - ₦18,750
22.2%
2.51% - 5% ₦250,001-
₦500,000 ₦250 - ₦12,500 ₦6,275- ₦25,000 ₦12,525 - ₦37,500

₦500,001-
₦500 - ₦25,000 ₦12,550 - ₦50,000 ₦25,050 - ₦75,000
₦1,000,000
70.4%
0.1% - 2.5% Above
₦1,000,000 Above ₦25,000 Above ₦50,000 Above ₦75,000

Based on the responses from the interviewed insurance companies, it can be

concluded that the premium rate for micro and small businesses is between 0.1% and
7.5%, broken down into three ranges.

THE NIGERIAN INSURANCE INDUSTRY 72

 INSURANCE COMPANIES AND THEIR AGENTS

Training and retaining financial sales associates

Share of interviewed insurance Share of business that subscribe to

companies that re-educate businesses insurance products and know how to make
brought in by their agents before claims, according to the interviewed
signing them up insurance companies

18.5% 22.2%
No re-
education Don’t know
how to make
claims

77.8%
Know how to
make claims
81.5%
Some re-
education

There's a correlation between re-educating businesses brought in by agents before signing

them up and the percentage of insurance companies believe businesses know how to make
an insurance claim. 85.2% of the interviewed insurance companies said it takes a couple of
days to file claims which they pay within a month of being filed.

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 INSURANCE COMPANIES AND THEIR AGENTS

Training and retaining financial sales associates

How long it takes to make a claim according

to the insurance companies

14.8%
A couple of weeks

While it takes a couple of days to make a

claim with most of the insurance companies,
all interviewed insurance companies claimed
that payment is made within a month after a
claim is filed.

85.2%
A couple of days

THE NIGERIAN INSURANCE INDUSTRY 74

 OPPORTUNITIES

THE NIGERIAN INSURANCE INDUSTRY 75

 OPPORTUNITIES

Healthcare Automobile
1.41% of Nigerians were pushed below There were 11.76m vehicles
the $3.65 poverty line by out-of-pocket in Nigeria as of 2018
healthcare expenditure in 2017
Only 3.4m vehicles in Nigeria
15.59% of Nigerians spent more than 10% of are insured as of 2021
their household income on out-of-pocket
healthcare expenditure in 2018

4.09% of Nigerians spent more than 25% of their

household income on out-of-pocket healthcare
expenditure in 2018

Nigeria recorded 6.85 million cases

of malaria in 2015

Nigeria recorded 306.46 incidences of malaria

per 1,000 population at risk in 2021

Sources: Global Health Observatory. Geneva: World Health Organization; 2023, World Health Organization,
Global Health Observatory Data Repository/World Health Statistics

THE NIGERIAN INSURANCE INDUSTRY 76

 OPPORTUNITIES

Device Protection Income Protection

Smartphones accounted for 44% of the An estimated 60.5 million Nigerians
total connections in Nigeria in 2021 and this were employed as of 2021
number is expected to hit 64% by 2025
9.95m people were on the Contributory
Pension Scheme as of December 2022
600 million smartphone connections in ₦
sub-Saharan Africa by 2024 with Nigeria 89,329 participants of the Micro
as the biggest market in the region Pension Plan as of December 2022

6.8 million units of desktops,

notebooks, workstations, and tablets
were shipped across the Middle East
and Africa (MEA) region in Q4 2021.

Sources: GSMA Intelligence, International Data Corporation, National

Pension Commission, and International Labour Organization

THE NIGERIAN INSURANCE INDUSTRY 77

 OPPORTUNITIES

Others
Agriculture contributed About half of annual crop production in
24.05% of Nigeria's Gross Nigeria is lost to demages by pests
Domestic Product in 2022 annually as of 2021

Estimated 39.7 million MSMEs in Nigeria account for

MSMEs in Nigeria as of 96.7% of all businesses, contributing
2020 46.31% to the GDP as of 2020

MSMEs accounted for

6.21% 6.21% of gross exports
in 2021

Sources: National Bureau of Statistics, Small & Medium Enterprises Development Agency
of Nigeria, and Federal Ministry of Agriculture and Rural Development

THE NIGERIAN INSURANCE INDUSTRY 78

 STAKEHOLDER INSIGHTS

Kingsley Miller
CEO, Evolutics

What are the key infrastructures needed for an insurance-centric economy?

Nigeria needs to do much work to create an enabling environment for insurance to thrive.
Some of these would include setting up the regulator (NAICOM) to be independent of the
Ministry of Finance, and granting them financial autonomy.
Some more attention is required on developing the actuarial profession in Nigeria, starting
with the enactment of a Bill of Parliament to establish the Nigerian Actuarial Society and
properly define its role.
The government needs to lead by example by doing enough to insure its own assets as an
example to the populace.
The informal sector is really not in touch with the insurance market; is this something
for technology to solve or will it require more from policymakers?
The informal sector is overburdened with several taxes and an inefficient environment (poor
roads and no electricity), which makes it difficult for them to think rationally. I think
fundamentally solving the issues which will help the informal sector thrive will enable them
to think more rationally and insurance happens to fall within the space of rational thinking.
I do not think technology can get the informal sector in Nigeria — in its current state — to
buy insurance until policymakers resolve more fundamental issues, all other things being
equal.

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 STAKEHOLDER INSIGHTS

Temitope Adeyemi
CEO, Pay-U

What factors do you think are affecting the level of competition in the Nigerian
insurance market?
What seems to be low competition is actually not what we have played out within the
industry.
What will you call rate cutting by some insurers to enable them win accounts?
How will you describe prompt claim settlement in order to have customers talk about it on
camera so as to win over more accounts?
How will some insurers describe spending heavily on technology to increase service
process so as to treat the next customer well and have word of mouth advertising do the
magic?
There is stiff competition within the industry,it is not noticeable because no one including
the media is paying attention. I have had a sales person from another insurer win over my
account 8 years ago just by rate cutting.
Nobody wants to buy insurance but everybody needs insurance,nobody wants anything to
do with insurance but insurance is the bedrock of humanity,the only instrument that
bounces anyone back in the event of a catastrophe.
Commercial banks have lights beaming all over them because they have products relatable
to every class of citizen and that revolution started early 2000 through the use of
technology,before then the number of banked Nigerians were abysmal with no fierce
competition amongst the then players.

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 T E M I T O P E A D E Y E M I

What are the roles you think technology could play in driving insurance penetration in Nigeria, and Africa by extension?
Technology is the last frontier in deepening insurance penetration in Nigeria/Africa,in my opinion if technology doesn't get
us to 5% insurance penetration by 2050 we should all together forget about a mass adoption of insurance as a service.
One of the reasons why I believe technology will revolutionize insurance uptake in Nigeria is because of mobile phone
penetration rate and internet penetration rate across Nigeria. All that insurtechs need to do is build products that are
relatable to Nigerians (not some western copy and paste products) on the mobile/internet penetration rate and we will have
succeeded a great deal in improving insurance uptake.
One major reason why we have low insurance uptake is that traditional insurers play in the corporate space so as to deliver
on annual budget,if they had expended the same energy in retail like they do with corporate transactions we would have
recorded improved penetration rate however this should be an advantage to insurtechs. Insurtechs need to build products
that are relevant to the masses,distribute physically and through the use of technology,with this approach the curve of
insurance adoption by citizens will take the north route.

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Ibraheem Babalola
Founder/CEO, ETAP

What role(s) do you think technology can play in increasing insurance penetration in
Nigeria?
Easy access: Technology allows insurers to reach a wider customer base by providing
digital platforms such as mobile apps and websites. These platforms make it convenient
for individuals to research, purchase, and manage insurance policies at their fingertips. For
example, ETAP's car insurance app enables customers to insure their cars in just 90
seconds, significantly reducing the time and effort required to obtain coverage.
Simplified processes: Technology streamlines and simplifies insurance processes, making
them more transparent and user-friendly. Through automation and digitisation, customers
can complete policy applications, claims, and documentation efficiently. This reduces
paperwork, eliminates manual errors, and enhances overall customer experience. ETAP's
claim process, which takes only three minutes, is a prime example of how technology can
expedite traditionally complex procedures.
Data analytics and personalisation: Technology allows insurers to leverage data analytics
to gain valuable insights into customer behaviour, preferences, and risks. By analysing
data from various sources, insurers can customise insurance offerings, pricing, and
coverage to meet individual needs better. This personalisation enhances the relevance of
insurance products and helps individuals find suitable coverage options. ETAP's driving
insights feature utilises telematics data to provide customers with feedback on their
driving habits, empowering them to drive safely and potentially earn rewards for their
good driving behaviour.

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 I B R A H E E M B A B A L O L A

Financial inclusion: Technology enables insurers to reach underserved populations, fostering financial inclusion. By offering
affordable microinsurance products through mobile platforms, insurers can extend coverage to low-income individuals and
those in remote areas. This expands insurance penetration and provides financial protection to previously underserved
segments of the population.
Driving safety and rewards: Technology-driven insurance solutions often incorporate features that promote safe driving
behaviours, such as monitoring driving patterns and providing personalised feedback. By adopting these technologies,
individuals outside the technology fold can benefit from safer driving practices and potentially reduce their insurance
premiums. This not only enhances road safety but also incentivises individuals to engage with insurance companies through
technology-driven platforms.
Speed and efficiency: With technological advancements, insurance processes can be streamlined and automated, reducing
the time required for policy issuance and claims settlement.
How can people without access to technology benefit from technology-driven insurance adoption in Nigeria?
While technology-driven solutions are essential in expanding insurance penetration, it is important to adopt a multi-faceted
approach that caters to the diverse needs of the population, including those without access to technology. By combining
offline channels, public awareness campaigns, collaborations with NGOs, mobile-based initiatives, and government support,
the benefits of technology in driving insurance adoption can be extended to a broader audience. While not everyone may
have smartphones or Internet access, feature phones are still prevalent in many areas. A number of insurance companies have
developed solutions that cater to feature phone users, such as interactive voice response (IVR) systems, USSD, and SMS-
based services. These channels can provide basic insurance information, premium payment options, and claims assistance for
people with limited or no access to technology.
Technology-driven insurance solutions in Nigeria benefit both the tech-savvy and those outside the technology fold by
increasing accessibility, simplifying processes, improving awareness, providing customer support, and promoting safer
behaviour.

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 STAKEHOLDER INSIGHTS

Adebowale Banjo
Co Founder, MyCover.ai

What factors do you think are affecting the level of competition in the Nigeria's
insurance market?

The Nigerian insurance market is undergoing a transformative phase, driven by the advent
of insurtech companies and changes in the regulatory landscape. The National Insurance
Commission (NAICOM) is proactively working to create a more competitive environment
that fosters growth and innovation exemplified by the recent launch of its Sandbox to
facilitate the introduction of new ideas and products.

NAICOM has recognised the importance of a dynamic regulatory framework that promotes
fair market practices and safeguards consumer interests. Through strategic reforms and
proactive engagement with industry stakeholders, NAICOM is streamlining regulations to
enhance transparency, encourage product innovation, and strengthen consumer protection
measures. These efforts are paving the way for a level playing field where insurers can
compete based on merit, quality of offerings, and customer-centricity.

Insurers in partnership with insurtech firms are embracing product differentiation to gain
competitive edge. Recognising that customers seek tailored solutions, insurers are
leveraging market insights and analytics to develop innovative products that meet specific
needs. By offering unique value propositions, such as customisable coverage, bundled
services, or niche market offerings, they are carving out distinct market positions and
attracting customers who demand more than just standardised insurance products.

Furthermore, this fusion of insurance and technology is redefining the competitive

landscape. Insurers are harnessing cutting-edge technologies, including artificial

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 A D E B O W A L E B A N J O

intelligence, data analytics, and digital platforms to reimagine their operations and customer experiences. From streamlined
underwriting processes to personalised policy recommendations, technology enables insurers to deliver greater
convenience, efficiency, and superior value to policyholders. Embracing digital transformation is no longer an option but a
strategic imperative for insurers seeking to thrive in a highly competitive marketplace.

As the regulatory landscape becomes more enabling, insurers adept at product differentiation and technological
advancements will emerge as frontrunners in the Nigerian insurance market. The synergy between a forward-thinking
regulator, innovative insurers, and empowered customers sets the stage for a future characterised by intense competition,
customer-centricity, and transformative growth. The convergence of these factors positions the Nigerian insurance market
for a compelling evolution, where the industry's potential is unleashed, and customer satisfaction reaches new heights.

What roles do you think technology can play in driving insurance penetration in Nigeria, and Africa by extension?

Technology is poised to revolutionise insurance penetration in Nigeria and across Africa, playing a transformative and
dynamic role in driving growth. With its immense potential, technology can be a catalyst for expanding insurance coverage
and bridging the gap between the industry and underserved populations.

To start with, technology will enhance accessibility by leveraging mobile devices and Internet connectivity. Mobile apps and
digital platforms empower insurers to reach more people faster and for less money, enabling individuals to easily access and
purchase insurance products.

This extended reach creates opportunities to tap into previously untapped markets, boosting insurance penetration and
financial inclusion.

Additionally, technology streamlines the customer experience, making insurance more user-friendly and engaging. Digital
interfaces facilitate policy comparisons, quotes, and purchases, while virtual assistants and chatbots provide instant support.
This seamless and personalised customer journey enhances satisfaction and builds trust, encouraging more individuals to
embrace insurance.

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 A D E B O W A L E B A N J O

Technology will drive the implementation and growth of microinsurance initiatives, catering to low-income individuals
through affordable coverage in small increments. Mobile payments and digital platforms make microinsurance accessible and
cost-effective, addressing the specific needs of underserved populations. Furthermore, technology will facilitate the adoption
of usage-based insurance, where premiums are based on actual usage or behaviour. This innovative approach will appeal to
a wider customer base, promoting affordability and adoption.

Insurers can leverage technology to combat fraud and improve risk management. Artificial intelligence and machine learning
help detect and prevent fraudulent activities, safeguarding insurers from losses. By employing these technologies, insurers
can identify suspicious claims, track fraudulent patterns, and enhance risk assessment models, ensuring sustainable
operations.

In conclusion, technology's impact on insurance penetration in Nigeria and Africa will be immense. By leveraging technology,
insurers can reach untapped markets, improve risk management, and create tailored insurance solutions. With technology as
a driving force, the insurance industry will be revolutionised, making insurance accessible, affordable, and relevant to diverse
populations throughout the continent.

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 STAKEHOLDER INSIGHTS

Gbenro Dara
Founder/CEO, Octamile

What roles do you think technology will play in driving insurance penetration and
acceptance in Nigeria and Africa?

Insurance penetration in Africa has been stuck around 3% for years, hampered by lack of
education and access to affordable policies when they are needed the most. By harnessing
the power of technology, the insurance industry in Nigeria and Africa can overcome
barriers to penetration, reach underserved populations, and build trust among potential
customers, ultimately driving insurance acceptance and growth.

We are bullish about the following technologies to transform the insurance value chain and
impact insurance penetration in Africa:

● Digital distribution: Utilising APIs, mobile apps, and websites to reach a broader
customer base, including remote areas.

● Automation: Automating premium payments and claims processing with AI and cloud
solutions.

● Data Analytics: Assessing risks, creating personalised policies, and accurate pricing using
data-driven insights.

● Telematics and IoT: Leveraging real-time data and analytics to offer usage-based
insurance.

THE NIGERIAN INSURANCE INDUSTRY 87

REFERENCES
Fire outbreaks figures: ORODATA SCIENCE (https://www.orodataviz.com/market-fire-outbreaks-in-nigeria/)
Saved for old age: Global Findex database (http://datatopics.worldbank.org/financialinclusion/)
Auto Insurance figure: Nigerian Insurance Association (NIA)
Industry Assets: National Insurance Commission
Gross Premium Income: National Insurance Commission
Global insurance figure: Atlas Magazine
Pakistan figures: Insurance Industry Statistics 2021,Securities and EXchange Commission of Pakistan (https://
www.secp.gov.pk/document/insurance-industry-statistics-2021/?wpdmdl=45871&refresh=63736ff06ad851668509680)
Indonesia: Indonesia General Insurance Market Size, Trends by Line of Business (Personal and Health, Financial Lines,
Property, Motor, Marine, Aviation and Transit Insurance, and Miscellaneous), Distribution Channel, Competitive Landscape
and Forecast, 2021-2025 (https://www.globaldata.com/store/report/indonesia-general-insurance-market-analysis/)
Egypt industry: Atlas Magazine (https://www.atlas-mag.net/en/article/egyptian-insurance-market)
Ethiopia industry figures: GlobalData (https://www.globaldata.com/store/report/ethiopia-insurance-market-analysis/)
Brazil industry figures (https://www.lifeinsuranceinternational.com/market-data/brazil-insurance-industry-cagr-2021/)
DR Congo Industry figures: (https://www.atlas-mag.net/en/article/drc-insurance-market-221-million-usd-turnover-in-2021)
Leadway Insurance 2022 figures: (https://y2x2y4h7.stackpathcdn.com/wp-content/uploads/2023/04/LEADWAY-2022-
ANNUAL-REPORT-ACCOUNTS-NEW-1-2.pdf)
AIICO Insurance 2022 figures: (https://www.aiicoplc.com/images/financialreports/Annual/AIICO_2022_Annual_Report.pdf)
Custodian and Allied Insurance 2022 figures: (https://drive.google.com/file/d/1uSOooD-XLhv7Ks5llGBlXa70K0D5W_z3/
view)
AXA Mansard 2022 figures: (https://corporate.axamansard.com/wp-content/uploads/
2023/07/2022_Annual_Report_compressed_x.pdf)
REFERENCES
Mutual Benefit Insurance 2022 figures: (https://www.mutualng.com/assets/docs/plc-investors//
2022/2022%20MUTUAL%20BENEFITS%20ANNUAL%20REPORT.pdf)
NEM Insurance 2022 figures: (https://doclib.ngxgroup.com/Financial_NewsDocs/37966_NEM_INSURANCE_PLC.-
_QUARTER_5_-_FINANCIAL_STATEMENT_FOR_2022_FINANCIAL_STATEMENTS_MARCH_2023.pdf)
Cornerstone Insurance 2022 figures: (https://cornerstone.com.ng/corporate/
CORNERSTONE%20ANNUAL%20REPORT-2022.pdf)
Coronation Insurance 2022 figures: (https://eu-assets.contentstack.com/v3/assets/bltacf39601912ccb86/
bltbf94ee3af2723b0b/650977f906142aa2fa436efb/
Coronation_2022_Annual_Reports_Version_FA1_Full_Colour_compressed.pdf)
Sovereign Trust Insurance 2022 figures: (https://stiplc.com/web/cms/uploads/
STI%20PLC%202022%20ARA_A%20_reduction.pdf)
Lasaco Insurance 2022 figures: (https://lasacoassurance.com/wp-content/uploads/2023/05/2022-AFS.pdf)
Linkage Assurance 2022 figures: (https://www.linkageassurance.com/wp-content/uploads/2023/07/
Linkage_2022_Annual_Report.pdf)
Consolidated Hallmark Insurance 2022 figures: (https://chiplc.com/wp-content/uploads/2023/05/2022-CHI-Plc-Annual-
Report-Accounts.pdf)
Prestige Insurance 2022 figures: (https://www.prestigeassuranceplc.com/Prestige%20Assurance%20Plc-
%20Audited%20&%20Approved%20Financial%20Statements%202022-.pdf)
Motor vehicle insurance figures (https://businessday.ng/insurance/article/71-7-of-vehicles-in-nigeria-have-no-insurance)
THE TEAM
Abiodun Adenle
Research Analyst

Joe Olayinka
Graphics Designer

Precious Mogoli
Lead Sub-editor

Yinka Awosanya
Research Lead
 @TheIntelpoint
intelpoint.co
[email protected]