Nigeria’s insurance industry premium rises to N2.3trn in FY 2025

…driven by surging oil, annuity businesses

Nigeria’s insurance industry saw premiums climb to N2.3 trillion in 2025, driven by businesses from the oil and gas sector, rising annuity uptake and improved risk retention by underwriters.

The performance according to industry analysts signal a deepening market with growing capacity to absorb large-ticket risks and support long-term financial security, as well as rising importance within the financial system.

Data released by the National Insurance Commission (NAICOM) Tuesday shows that Gross Premium Written climbed to N2.3 trillion, representing a 36 percent quarter-on-quarter increase and a 47.3 percent year-on-year jump.

Contained in the fourth quarter 2025 Bulletin of the Insurance market, the expansion was led by Oil & Gas in the non-life segment and annuity products in life insurance.

Oil & Gas accounted for more than 30 percent of non-life premiums, maintaining its position as the industry’s largest risk portfolio, while fire and motor insurance reflected sustained demand for corporate asset protection and retail coverage.

In life insurance, annuities contributed 44.3 percent of premiums, highlighting a structural shift tied to pension reforms as retirees increasingly convert savings into guaranteed income products, with individual life policies also gaining traction.

The dual growth engines of corporate risk underwriting and long-term savings products point to a market gradually deepening across both institutional and retail segments.

Premium retention rose to 68.1 percent, with life insurance reaching 94.1 percent, signalling growing confidence among insurers to retain risk locally rather than cede to reinsurers. The trend reflects improving capital buffers, better pricing discipline and enhanced technical capacity, though weaker retention in marine, aviation and Oil & Gas continues to highlight capital constraints in high-risk segments.

Claims increased to N724.7 billion, or 31.5 percent of premiums, with strong settlement ratios of 65.5 percent in life and 75.5 percent in non-life. The rise in claims points to improved claims management, stronger policyholder confidence and more active utilisation of insurance products, with motor, miscellaneous and general accident segments posting settlement ratios above 80 percent.

Profitability remained resilient, with an industry net loss ratio of 43.6 percent, as life insurance outperformed non-life with lower loss ratios, consistent with the stability of long-term products. Still, disparities persist, with some insurers recording loss ratios above 100 percent, underscoring ongoing challenges around pricing and capital adequacy.

Market concentration remains high in life insurance, where the top three players control about 55 percent of premiums and the top ten nearly 90 percent, while the non-life segment shows a more balanced competitive structure, suggesting manageable concentration risk overall.

Total industry assets rose by 7.4 to N4.79 trillion, supported by premium inflows, investment income and strengthening capital positions. Non-life insurers retain a larger asset base, but life insurance is gaining ground, driven by pension-linked growth.

The outlook remains positive, supported by recapitalisation efforts, pension expansion, and sustained activity in the energy sector and gradual improvements in financial awareness.

Despite macroeconomic pressures, the industry is showing increasing resilience and capacity to support economic risk management, the analysts said.

“If ongoing reforms address capital gaps, Nigeria’s insurance sector is poised to deepen penetration and play a more significant role in the country’s long-term economic development.”