• Make insurance policies simple, appealing to Nigerians, analyst urges
• NAICOM, senator laud President
With the news of President Bola Tinubu assenting to a new insurance reform law aimed at recapitalising the industry and boosting investor confidence, insurance stocks on the Nigerian Exchange Limited (NGX) surged 10 per cent yesterday.
To boost public confidence and uptake in the industry, a financial analyst, Johnson Chukwu, called for insurance policies in Nigeria to be simplified and made more transparent.
Meanwhile, the National Insurance Commission (NAICOM) lauded Tinubu for the signing, describing the move as a pivotal moment for the nation’s financial services sector.
Also, the Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Adetokunbo Abiru, commended the President for assenting to the bill, now signed into law as the Nigerian Insurance Industry Reform Act (NIIRA), 2025.
The Guardian learnt that Tinubu assented to the bill to strengthen Nigeria’s financial sector and accelerate the nation’s march towards a $1 trillion economy.
According to the Special Adviser on Information and Strategy to the President, Bayo Onanuga, NIIRA 2025 repeals and consolidates several outdated insurance laws into a single, modern legal framework.
Within 24 hours after the news broke, the share prices of most insurance companies surged 10 per cent.
Out of 17 insurance stocks, only two recorded zero movement from the previous day’s closing price, as of the time of filing this report.
Featuring on Channels Television’s breakfast programme, ‘The Morning Brief’, following Tinubu’s assent to the bill, Chukwu stated: “What is most important is that insurance contracts are simplified in such a way that a layman can understand the terms.
“One of the major challenges we face with insurance in Nigeria is the abundance of exclusion clauses embedded in policy documents, clauses that the average holder may not even notice or understand.”
The founder of Cowry Asset Management Limited emphasised the need for clearer, more digestible documents while illustrating a typical scenario involving car insurance.
“Policies should be driven by bullet points and presented in a one-page document that anyone can read and understand; the dos and don’ts must be obvious. For instance, you have a car insurance policy, and you’re unaware that it excludes coverage if a minor drives the vehicle. You give the car to your 17-year-old son to fetch groceries, and he gets into an accident. You inform the insurer, only to be told the policy is void because your son is underage. If that exclusion clause had been clearly presented, you would never have handed the vehicle to him in the first place,” he explained.
In a statement issued in Abuja, Abiru described the development as a pivotal milestone in the collective efforts to reposition Nigeria’s financial services sector for inclusive growth and global competitiveness.
Abiru, who was the lead sponsor of the bill with the entire Senate Committee as co-sponsors, said NIIRA “represents one of the most comprehensive and far-reaching reforms in the history of Nigeria’s insurance industry.”
He added that the reform aligns with the Federal Government’s goal of building a $1 trillion economy, stressing that “it is a testament to what is achievable when all arms of government work in concert to deliver on the Renewed Hope Agenda.”
The senator acknowledged the support of Senate leadership, his colleagues in both chambers of the National Assembly, NAICOM and industry stakeholders for their roles in the bill’s passage.
NAICOM also pledged its unwavering commitment to ensure the effective implementation of the Act across the country.
In a statement yesterday, NAICOM expressed appreciation to the President for his leadership and vision in driving long-overdue reforms in the insurance industry.
According to the commission, the new legislation marks a historic step towards enhancing public trust, strengthening regulatory frameworks and expanding insurance penetration among Nigerians.
“The passage and presidential assent to the Insurance Reform Act 2025 is a significant milestone in Nigeria’s economic reform agenda. It demonstrates the government’s resolve to reposition the insurance sector as a major contributor to national development,” the statement reads.
NAICOM pledged to uphold transparency, fairness and regulatory excellence in executing the provisions of the new law.
“We are fully prepared to lead the charge in ensuring that the transformative objectives of the Act are fully realised. NAICOM will engage all operators, consumers and relevant stakeholders in a participatory implementation process to ensure a smooth transition,” the commission affirmed.
