Despite being Africa’s most populous nation with over 230 million people, Nigeria’s insurance penetration languishes at 0.4 per cent, far behind South Africa’s 11 per cent, leaving millions financially unprotected.

Nigeria is Africa’s most populous nation with over 230 million people, yet millions lack insurance cover.

In Africa, South Africa remains the dominant player, with a penetration rate of over 11 per cent, while Nigeria lags behind at roughly 0.4 per cent.

Other African nations have fared better. Namibia posts an insurance penetration of 7.5 per cent, while Morocco boasts a penetration rate of 3.6 per cent, according to Atlas Magazine.

In Europe, insurance penetration is even much better, with Luxembourg reaching over 30 per cent owing to its specialised international life insurance and reinsurance sectors.

Switzerland ranges between nine per cent and 10 per cent, bolstered by mandatory health and robust life insurance uptake. The United Kingdom and France consistently exceed 10 per cent of GDP due to deep-rooted life, pension, and investment-linked insurance markets, according to the Organisation for Economic Co-operation and Development. Germany sits around six per cent, right near the European average.

In Asia, the numbers vary, ranging from global highs in advanced economies to lower single digits in developing markets. Taiwan boasts one of the highest insurance penetration rates in the world, often exceeding 20 per cent. On the other hand, Hong Kong has a high penetration level of 15 per cent due to the mature life and retirement sectors. Japan sits between seven per cent and eight per cent, driven primarily by life insurance, where 90 per cent of families own policies. Even in India, with a population over six times Nigeria’s, penetration rests at 3.7 per cent.

Numbers unprotected

The interesting thing is that some of the nations with high insurance penetration are a quarter or half of Nigeria’s population.

Namibia, with 7.5 per cent penetration, is inhabited by three million people. Switzerland, which has between nine per cent and 10 per cent penetration rate, is made up of nine million people. Similarly, South Africa boasts the highest insurance penetration on the continent (11 per cent), yet comprises just about 64 million people.

On the other hand, Nigeria, which often brags about its demographic strength, lags behind its peers at less than one per cent.

As of December 2025, the estimated insurance revenue in Nigeria stood at N1.9tn, according to Agusto & Co. South African firms, on the other hand, generated $49bn in total annual premium revenue.

Why Nigerians uninsured

There are several reasons why millions of Nigerian citizens do not have insurance cover. Experts say the major reason only less than 15 per cent of Nigerians have insurance cover is widespread poverty. A World Bank 2025 report noted that the share of Nigerians living below the poverty line had increased from 56 per cent in 2023 to 61 per cent in 2024, before rising further to 63 per cent in 2025, equivalent to about 140 million people.

“If you are poor, you are pre-occupied with what to eat and where to put your head. Where more than half of the population live below the poverty line, how do you expect insurance penetration to grow? How can you sell insurance to a nation with millions of poor people?” asked a Lagos-based emerging markets expert, Ike Ibeabuchi.

According to the Nigerian Council of Registered Insurance Brokers, the exclusion of pensions and micro insurance drivers, lack of technology and ignorance are reasons for low insurance penetration in Nigeria.

The President, NCRIB, Ekeoma Ezeibe, raised the concerns last month at Nnamdi Azikiwe University, Awka, Anambra State during the 2026 Inaugural Annual Insurance Week.

He said, “To be realistic, looking at South Africa and Kenya vis-à-vis their insurance market, and the drivers of their insurance penetration, you discover they are mostly pensions and micro insurance.

“But in Nigeria, pension, which used to be part of insurance in Nigeria, is now removed with the introduction of Pension Reforms Act and now domiciled with the National Pension Commission.

“If you check how many trillions that are domiciled from pension funds with PenCom, you can imagine what will happen if it is brought into the insurance net in Nigeria.”

Experts say there is a deep-seated belief among Nigerians that insurance companies evade paying claims or make the payout process unnecessarily difficult and bureaucratic.

Similarly, it is difficult to sell life insurance cover in Nigeria owing to the deep-rooted belief system and fear.

“A lot of Nigerians do not even want to entertain any story of death. So, imagine if you want to sell life insurance to them,” said a Lagos-based economist, Peter Iredia.

“That is also because of low awareness by stakeholders. Insurers and the government must begin to do more. I do not think they are doing enough.”