Understanding the Changes in Nigeria’s Insurance Industry
Experts Say Insurance Reform Could Restore Public Trust
A legal practitioner has highlighted the urgent need for reforms in Nigeria’s insurance industry, pointing to years of disputes between insurers and policyholders over claim payments.
In an opinion piece, Charles Ude explained that many Nigerians have historically struggled to receive compensation from insurance companies, even when they had valid policies.
According to him, the problem was largely rooted in the traditional legal principle known as Uberrimae fidei, or “utmost good faith,” which governs insurance contracts.
Under older legal frameworks such as the Marine Insurance Act 1961 and the Insurance Act 2003, insurers could cancel policies entirely if they discovered that a policyholder failed to disclose any “material fact,” even if the omission was unintentional.
Critics argued that this rule often left honest policyholders without compensation after accidents or losses.
The situation, however, may be changing following a new reform signed into law by Bola Ahmed Tinubu.
On August 5, 2025, the Nigerian president signed the Nigerian Insurance Industry Reform Act 2025, a law designed to modernize the country’s insurance sector and improve fairness in claims processing.
The legislation introduces new protections aimed at preventing insurers from easily rejecting claims based on minor or innocent mistakes in policy disclosures.
According to analysts, the reforms move Nigeria closer to global best practices already implemented in countries like the United Kingdom, where similar reforms were introduced through the Insurance Act 2015.
Experts say the success of the new reforms will depend on enforcement by regulators such as the National Insurance Commission and how Nigerian courts interpret the new legal framework.
For many Nigerians, the hope is that the reforms will rebuild trust in the insurance sector and ensure that policyholders receive fair treatment when making legitimate claims.
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