Trading volume in Nigeria’s insurance sector surged by nearly 300 per cent on Wednesday just 24 hours after President Bola Tinubu signed the Nigerian Insurance Industry Reform Act 2025 into law.
Data from the Nigerian Exchange Limited (NGX) showed that the volume of insurance stocks traded rose sharply to 1.88 billion units, a 299.15 per cent jump from 471.8 million units recorded on Tuesday. This spike comes despite a 55.29 per cent drop in the number of transactions, which declined to 1,358 trades from 3,038.
The sharp rally saw 16 insurance stocks appreciate in value, with top performers including AXA Mansard, Mutual Benefits Assurance, and NEM Insurance, each gaining the maximum 10 per cent allowed in a single session. Other stocks such as Guinea Insurance and Regency Assurance Plc also recorded strong gains of over 9 per cent.
The bullish sentiment was driven by investor optimism surrounding the newly enacted Insurance Industry Reform Act (NIIRA) 2025, which overhauls and consolidates outdated insurance laws into a single, modern legal framework aimed at strengthening the sector.
Key highlights of the Act include:
- Stricter capital requirements to ensure financial soundness of operators
- Mandatory insurance policies to boost consumer protection
- Digitisation of the insurance market for improved access and efficiency
- Strict enforcement of claims settlement timelines
- Creation of policyholder protection funds to shield customers in cases of insolvency
- Expanded regional insurance cooperation, including participation in the ECOWAS Brown Card Scheme
Analysts Predict Consolidation, Growth
Industry analysts have welcomed the reform, projecting significant changes in the sector’s competitive landscape.
CardinalStone, in a note on Wednesday, stated:
“These reforms are expected to reshape the competitive landscape of the industry, with the recapitalisation directive likely to pose challenges for the relatively smaller operators, given the existing market fragmentation amidst other structural bottlenecks.”
The firm also predicted a wave of mergers and acquisitions, as under-capitalised players scramble to meet the new thresholds. Insurers are expected to comply with the new capital requirements within 12 months, though further guidance on implementation is expected from regulators.
CardinalStone added that the reforms align with the federal government’s broader vision of achieving a $1 trillion economy by 2030, complementing other recent moves such as banking sector recapitalisation, the revised Investment and Securities Act, and the 2025 Tax Act.
The National Insurance Commission (NAICOM) and market observers say the new Act could significantly increase insurance penetration and boost the sector’s contribution to Nigeria’s GDP, which remains one of the lowest among emerging markets.
As implementation begins, stakeholders will be watching closely to see how the reforms reshape one of Nigeria’s most underdeveloped yet promising financial sectors.