Oil & gas, annuity business drive expansion as claims drop 21.7%, NAICOM reports…..
The Nigerian insurance industry recorded a sharp expansion in 2025, with Gross Premium Written (GPW) rising by 47.3 percent year-on-year to N2.301 trillion, up from N1.558 trillion in 2024.
This was disclosed in the latest industry report released by the National Insurance Commission, which attributed the strong performance to regulatory reforms, improved market confidence, and increased activity in key sectors such as oil and gas as well as annuity investments.
Premium Growth Driven by Key Segments
According to the report, the non-life insurance segment continued to dominate the market, accounting for 68.4 percent of total premiums, while life insurance contributed 31.6 percent.
Within the non-life category, the oil and gas business emerged as the largest driver, contributing 30.3 percent of total non-life premiums. It was followed by:
- Fire insurance (20.4%)
- Motor insurance (16.1%)
- Miscellaneous insurance (11.9%)
- General accident (9.5%)
- Marine (8.7%)
- Aviation (3.2%)
The report noted that the strong performance of oil and gas-related policies played a central role in boosting overall industry earnings.
Life Insurance Shift Toward Annuities
In the life insurance segment, annuity funds led activity, contributing 44.3 percent of total life premiums, marking a shift from previous reporting periods.
Individual life insurance accounted for 36.2 percent, while group life policies made up 19.5 percent of the segment.
NAICOM said the growing role of annuities reflects increasing demand for long-term savings and retirement income products in the Nigerian market.
Claims Payment Declines Despite Strong Underwriting
Despite the surge in premium income, total claims paid declined by 21.7 percent to N724.7 billion in 2025, compared to N926.1 billion in 2024.
The report indicated that claims payments represented about 31.5 percent of gross premiums written during the period.
It attributed the trend to improved claims management practices and stronger underwriting performance across the sector.
Stronger Claims Settlement Performance
The insurance industry also recorded relatively strong claims settlement ratios during the period under review.
- Life insurance recorded a settlement rate of 65.5 percent
- Non-life insurance achieved a higher settlement rate of 75.5 percent
NAICOM said these figures reflect improved operational efficiency and pricing discipline among insurers.
Sector Growth Outpaces Economy
The report highlighted that the insurance industry’s growth significantly outperformed Nigeria’s broader economic expansion of 3.9 percent during the period.
It described the development as evidence of increasing relevance of insurance within the country’s financial system, supported by regulatory interventions aimed at deepening market participation and boosting public confidence.
A Sector in Expansion Mode
Overall, NAICOM said 2025 marked a strong year for the insurance industry, driven by rising adoption across key sectors, improved regulatory oversight, and growing awareness of risk management products.
With premium income surging and claims dynamics stabilising, the industry appears to be entering a new phase of growth anchored on both traditional markets and emerging financial products.
