Akinwunmi Sees Huge Growth Potential In Nigeria’s Insurance Industry

By Sola Alabadan

Mr. Ayodele Akinwunmi, the Chief Economist of United Capital Plc, has identified Nigeria’s insurance industry as one of the economy’s biggest untapped opportunities, citing the sector’s low penetration rate and enormous growth potential.

Akinwunmi stated this while delivering a keynote address on “Post-Recapitalisation and Market Dynamics in Insurance and Pension Sectors” at the annual national conference of the Nigerian Association of Insurance and Pension Editors (NAIPE).

He said insurance companies that would emerge as industry leaders over the next decade would be those that deploy their capital strategically to strengthen underwriting capacity, develop inclusive products, invest in digital infrastructure and support productive long-term investments.

According to him, success in the post-recapitalisation era will depend not merely on the size of insurers’ balance sheets but on their ability to translate increased capital into improved business performance and greater value for customers.

Akinwunmi noted that Nigeria’s insurance penetration, estimated at between 0.4 per cent and 0.5 per cent of gross domestic product (GDP), remained among the lowest in the world, presenting significant opportunities for industry growth and expansion.

He said the recapitalisation exercise could trigger a transformation of the industry, leading to stronger insurance companies, deeper market penetration and a more resilient Nigerian economy.

According to him, increased minimum capital requirements and the adoption of risk-based solvency standards would strengthen insurers’ balance sheets, improve compliance with regulatory capital requirements and enhance their ability to withstand economic and financial shocks.

He explained that stronger capital bases would also enable Nigerian underwriters to assume larger and more complex risks, retain a greater proportion of domestic risks and reduce their dependence on foreign reinsurers.

Akinwunmi added that the increased capacity would allow insurers to provide greater support for critical sectors of the economy, including energy, infrastructure, small and medium-sized enterprises (SMEs), retail businesses and agriculture.

He further projected that recapitalisation would accelerate digital transformation in the industry through the adoption of digital platforms, expansion of distribution channels and increased use of data-driven pricing and underwriting.

The development, he said, would also encourage the introduction of innovative insurance products tailored to different customer segments, including microinsurance, retail insurance, parametric insurance, Takaful and other specialised offerings.

On service delivery, Akinwunmi said stronger capitalisation should support automation and straight-through claims processing, enabling operators to improve operational efficiency, enhance customer experience and speed up claims settlement.

He stressed that insurers must look beyond meeting regulatory capital requirements and focus on deploying their resources in ways that expand insurance access, strengthen risk management and deliver tangible benefits to policyholders.

The economist maintained that effective deployment of capital, combined with innovation and improved service delivery, would be critical to unlocking the Nigerian insurance industry’s growth potential and strengthening its contribution to the wider economy.