NIIRA Act 2025: Lessons from Africa’s Insurance Reforms and the Road Ahead for Nigeria

Nigeria’s new Nigeria Insurance and Reinsurance Act (NIIRA) 2025 has sparked wide debate across the financial sector. Designed to overhaul regulation, strengthen supervision, and raise capital requirements, the Act is billed as a turning point for an industry often criticised for low penetration, weak solvency, and eroding consumer trust.

But while its merits are clear—bolstering confidence, aligning with global standards, and attracting investment—stakeholders warn of possible pitfalls. To avoid them, analysts argue Nigeria must learn from the experiences of peer African nations that have walked a similar path.

The Promise of NIIRA 2025

The NIIRA Act aims to modernise Nigeria’s insurance framework in line with international best practices. By tightening regulatory oversight, raising capital adequacy standards, and empowering NAICOM to enforce stricter supervision, the Act seeks to create a safer market for policyholders and boost the industry’s contribution to GDP.

Supporters say it could provide the clarity and stability investors crave, strengthen consumer protection, and drive digital innovation to reach underserved Nigerians.

Yet the very measures that promise transformation could also backfire without careful implementation.

Lessons from Across Africa

Kenya: Stronger Supervision, but Painful Adjustments

Kenya’s Insurance Regulatory Authority (IRA) moved towards risk-based supervision and stricter capital rules. The reforms improved oversight and investor confidence but came at a cost: smaller insurers struggled to raise funds, and deadlines created pressure that forced mergers and exits. Analysts stress that Kenya’s experience shows the need for phased rollouts and regulator support.

Ghana: Recapitalisation Boosted Standards but Strained Firms

Ghana’s National Insurance Commission (NIC) raised capital requirements to strengthen solvency and governance. The move professionalised the industry and attracted new capital, but deadlines were seen as tight, leaving smaller firms scrambling. Stakeholders also noted the importance of pairing capital hikes with public education and capacity-building.

Tanzania: Digitisation Drove Growth, but Oversight Lagged

In Tanzania, the Insurance Regulatory Authority (TIRA) pursued active digitisation policies that boosted efficiency and premium growth. However, independent audits highlighted gaps in supervision and the need for stronger enforcement capacity. Tanzania’s lesson: technology adoption must go hand-in-hand with regulator readiness.

South Africa: Twin Peaks Reform Raised the Bar

South Africa adopted the “Twin Peaks” model, separating prudential and conduct regulation under a strengthened Prudential Authority. The reform improved consumer protection and solvency monitoring but required heavy institutional resources. Experts note that without sustained investment in regulatory capacity, even the best-designed frameworks falter.

Common Pitfalls to Avoid

Across these case studies, six recurring risks stand out:

1. Rushed Deadlines – forcing recapitalisation too quickly can destabilise firms and trigger avoidable exits.
2. Capacity Gaps – regulators often lacked the skilled staff and systems to enforce new rules effectively.
3. Market Concentration – smaller firms struggled to compete, leaving larger or foreign players dominant.
4. Rising Premiums – compliance costs sometimes pushed insurers to raise prices, making policies less affordable.
5. Digital Exclusion – while urban customers benefited, rural and low-tech populations were often left behind.
6. Weak Public Awareness – without consumer education, trust and uptake of insurance remained low.

The Nigerian Roadmap: Recommendations for Success

To ensure NIIRA delivers its promise without destabilising the sector, experts suggest a measured, inclusive approach:

• Phase Implementation: Stagger capital requirements with transitional deadlines to give smaller insurers breathing space.
• Strengthen NAICOM: Expand staffing, train actuaries and risk analysts, and upgrade digital supervision tools.
• Support Local Firms: Offer tax incentives, grants, or structured merger funds to help smaller insurers adapt.
• Protect Consumers: Monitor premium pricing, enforce plain-language policies, and expand micro-insurance offerings.
• Drive Inclusion: Pair digitisation with USSD channels, rural agent networks, and digital literacy campaigns.
• Engage Stakeholders: Maintain open dialogue with insurers, brokers, and consumer groups to refine rollout.
• Adopt Phased Risk-Based Supervision: Run pilot reporting and impact assessments before full enforcement.

The NIIRA Act 2025 has the potential to reshape Nigeria’s insurance sector into a stronger, safer, and more innovative industry. But as the experiences of Kenya, Ghana, Tanzania, and South Africa reveal, success depends not only on bold laws but also on smart, phased, and inclusive execution.

If Nigeria learns from these lessons, the Act could unlock insurance’s role as a true driver of economic growth, financial security, and public trust. If not, the industry risks repeating the missteps of its peers—jeopardising both firms and policyholders.

Nigeria’s NIIRA Act 2025 promises to transform insurance regulation with stricter capital rules and stronger supervision. But lessons from Kenya, Ghana, Tanzania, and South Africa show that poor implementation could backfire.