Deepening insurance penetration is a major challenge post-recapitalisation – Ben Mamedu
Ben Mamedu, Executive Director of BrandZeal Media Limited
Highly experienced industry media practitioner, Ben Mamedu, the Executive Director of BrandZeal Media Limited, has posited that deepening the insurance penetration rate in Nigeria remains a major challenge for operators following the recent successful recapitalization in the sector.
Speaking to Newsmen in Lagos, he commended the regulators- the National Insurance Commission (NAICOM) for a very successful exercise, and the over 90% players in the industry that scaled through seamlessly. With funds now ploughed into the sector by shareholders and investors to boost operational capital, he said the time is now to effectively deploy the funds raised towards meeting the expectations of all stakeholders including investors, policy holders, the mass of the Nigerian uninsured people and others.
According to him, the undisputed fact over the years is that the insurance penetration rate in Nigeria has remained abysmally low at less than 1% of the Gross Domestic Product. While countries like South Africa has an insurance penetration rate of about 11.54% of GDP (life and non-life, far above the global average of about 6.8%), the famed giant of Africa thus yields the “giant” in insurance penetration to South Africa effortlessly. Countries like Namibia and Egypt also lead Nigeria in penetration rates, as less than 3% of Nigerians are reported to have any form of insurance cover.
While past and the present insurance industry recapitalization efforts successfully led to increase in capital for operations, sometimes by over 300%, boost in the penetration rate has only marginally improved from 0.3% to about 0.45% at the most. In Q1 2026 for instance, while the insurance sub-sector reportedly contributed ₦180.95 billion to Nigeria’s Gross Domestic Product, banks and other financial institutions contributed ₦1.75 trillion in the same quarter, meaning insurance made up a small fraction (10% only) of the combined ₦1.93 trillion finance and insurance contribution.
What Insurance Operators Can Do Differently
In order to break the seeming jinx of the abysmally low insurance penetration rate in Nigeria, operators in the sector, led by the regulator should ensure that funds realized from the recapitalization exercise are appropriately utilized to reach the unreached population with insurance products which help ameliorate misfortunes in the event of the unexpected. Continually chasing after big ticket transactions from the corporate world will contribute little towards boosting the reach.
In this regard, effective partnerships with the media for strategic communication geared towards erasing misplaced negative perceptions would play a crucial role, while also investing massively in technology such that retail products are actually brought to the fingertips of prospects and consumers of insurance products in the nooks and crannies of Nigerians. This is even more crucial as tradition door to door insurance agency mode has since been replaced with technology. Doing otherwise would be likened to the popular cliché of doing the same thing, same way and expecting a different result (in the insurance penetration rate – contribution of insurance to GDP, or improving significantly on the percentage of Nigerians that have a form of insurance cover).
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