Insurance Sector Growth Outpaces Banking but Fails to Boost Nigeria’s GDP Significantly
Nigeria’s insurance sector continues to face a paradox: strong growth rates but minimal contribution to the country’s gross domestic product (GDP). According to the latest data from the National Bureau of Statistics (NBS), while the financial services sector overall grew by 15% last year, insurance accounted for just a fraction of the total output, highlighting a persistent structural weakness in the industry.
The figures reveal a stark imbalance within financial services. Banks contributed N5.87 trillion to GDP, whereas the insurance industry added only N710.58 billion, despite posting a higher growth rate of 16.04% compared to banks’ 14.36%. Quarterly breakdowns showed steady expansion, with insurance recording a standout 21.37% growth in the fourth quarter of 2025, making it the fastest-growing segment in the sector. Yet, in real terms, insurance made up just 9.57% of the financial services contribution, leaving banking to dominate at 90.43%.
Experts say the disconnect between growth and real economic impact stems from low insurance penetration, weak enforcement of compulsory policies, and lingering public mistrust. Speaking at a Lagos forum, Commissioner for Insurance Olusegun Omosehin highlighted early gains from recent reforms but emphasized the need for deeper structural changes. “With the Insurance Industry Reform Act now in force, we have a unique opportunity to strengthen governance, enhance prudential standards, and expand access across all segments of the economy,” he said.
Industry leaders echo the call for action. Bola Odukale, Director-General of the Nigerian Insurers Association, stressed that growth metrics must translate into tangible GDP impact through innovation, enforcement, and consumer trust. Ekeoma Ezeibe, President of the Nigeria Council of Registered Insurance Brokers, added that brokers are engaging communities and SMEs to boost penetration, while advocating digital distribution and fintech partnerships to expand coverage nationwide.
Financial analysts warn that Nigeria’s insurance sector remains underdeveloped compared to other African markets. Johnson Chukwu noted that the sector is growing from a low base, and until insurance becomes a routine part of economic life, its contribution to GDP will remain limited. Stakeholders agree that bridging this gap is crucial for the sector to evolve from a high-growth, low-impact industry into a cornerstone of Nigeria’s economy.
source: The Guardian