Global Insurance Models Offer Lessons for Nigeria’s Drive to Expand Coverage

Nigeria’s insurance industry can draw important lessons from more developed markets as it seeks to expand coverage, rebuild consumer confidence and make insurance more relevant to households and businesses.

The industry is entering a new phase following recent recapitalisation and regulatory reforms, but stakeholders say stronger balance sheets alone will not be enough to significantly increase insurance penetration. Insurers will also need to improve claims settlement, product affordability, digital distribution and customer experience.

The National Insurance Commission has identified low public awareness, weak consumer trust and fragmented distribution channels among the factors limiting insurance adoption. The regulator’s Insurance Sector Strengthening Programme targets an increase in insurance penetration from about 0.5 per cent of GDP to 10 per cent by 2031.

Faster Claims Could Rebuild Consumer Trust

One of the clearest lessons from international insurance markets is the importance of paying legitimate claims quickly and efficiently.

In Singapore, MSIG Insurance has increasingly relied on digital processes to simplify claims and accelerate settlements. The insurer reported a 94 per cent claims settlement ratio, while 92 per cent of its fast-track claims were settled within three days.

Research by Sollers Consulting and Ipsos also found that fast claims settlement ranks among the most important factors for customers after submitting a claim.

For Nigerian insurers, the implication is straightforward: the claims process must become easier to understand, faster to complete and more transparent.

Regular updates, simplified documentation and electronic payments could significantly improve the customer experience, particularly for retail policyholders and small businesses.

Insurance Products Must Reflect Customers’ Incomes

Affordability is another area where international models offer useful lessons.

In Kenya and Uganda, microinsurance provider Turaco has partnered with financial-services institutions to distribute life, credit-life and hospital cash protection alongside existing financial products.

With premiums starting from as little as $0.50 per month in one of its Kenya offerings, the model demonstrates how insurance can be incorporated into financial services that customers already use. Digital claims processes also allow eligible claims to be processed within a short period.

Nigerian insurers could adapt similar models by partnering with microfinance banks, cooperatives, market associations, agricultural organisations and digital lenders.

Such partnerships could reduce distribution costs while allowing insurers to reach customers who may never walk into a conventional insurance office.

Embedded Insurance Could Expand the Market

Another opportunity lies in embedded insurance, where coverage is offered as part of an existing transaction or service.

Instead of requiring customers to separately search for and purchase an insurance policy, insurers can distribute relevant products through banks, mobile applications, retailers, lenders, travel platforms and other businesses with established customer relationships.

For example, vehicle financing could include motor insurance, agricultural financing could incorporate crop or equipment protection, while small-business lending could be linked to appropriate business-risk cover.

The model could help insurers reach more customers while reducing the cost and complexity of acquiring new policyholders.

Technology Can Reduce Costs and Improve Service

Digital transformation is also becoming increasingly important to the competitiveness of insurance companies.

Technology can simplify policy purchases and renewals, automate routine claims processing, verify documents and provide customers with real-time updates.

However, industry stakeholders caution that simply launching mobile applications is not enough. Digital tools must solve genuine customer problems and improve the speed, transparency and reliability of insurance services.

Nigeria’s regulator has already identified digital transformation and InsurTech as important components of the sector’s development. Recent regulatory reforms have also created a stronger framework for technology adoption, microinsurance and policyholder protection.

Stronger Capital Must Translate Into Better Service

Nigeria’s recapitalisation exercise has strengthened the financial foundations of insurance companies, but industry leaders say the real test will be how that stronger capital base translates into improved services.

The Nigerian Insurers Association has warned that insurers must not treat recapitalisation as an end in itself. Stronger balance sheets should support greater underwriting capacity, innovation, improved claims service and wider market penetration.

The sector’s challenge is therefore shifting from financial resilience to market relevance.

Customers need to see insurance as a practical financial tool rather than an unnecessary expense, while businesses need products that address the specific risks they face.

Opportunity for Nigeria’s Insurance Market

Nigeria’s low insurance penetration also represents a significant growth opportunity.

With millions of households, MSMEs and informal businesses still operating with limited insurance protection, insurers have a large potential customer base if they can develop products that are affordable, accessible and easy to understand.

The new regulatory environment could further support this expansion. The Nigerian Insurance Industry Reform Act 2025 introduced a more risk-sensitive framework, strengthened policyholder protection and promoted a more modern regulatory structure.

For Nigerian insurers, the international examples provide a clear roadmap: settle legitimate claims faster, design products around customers’ financial realities, distribute insurance through platforms people already use and deploy technology to reduce friction.

Ultimately, the companies that successfully translate stronger capital positions into better customer experiences may be best positioned to capture the next phase of growth in Nigeria’s insurance market.