Tinubu’s Year Two: Revamping Economy & Insurance Sectors 

As President Bola Ahmed Tinubu approaches the second anniversary of his administration in May 2025, Nigeria stands at a critical juncture of economic transformation that has sent ripples across every sector of the nation’s economy, with the insurance industry emerging as a particularly compelling case study of both challenge and opportunity. The bold economic reforms initiated from the very first days of his presidency have fundamentally altered the operational landscape for businesses, creating new realities that demand both resilience and strategic adaptation.

The removal of fuel subsidies, one of Tinubu’s most consequential early decisions, created immediate shockwaves throughout the Nigerian economy that continue to reverberate today. This policy shift, while painful in its immediate implementation, has begun to yield the intended fiscal benefits that the administration had projected. The savings generated from subsidy removal have been redirected toward critical infrastructure projects and social programs, creating a multiplier effect that has gradually begun to stimulate economic activity across various sectors. For the insurance industry specifically, this policy change represented both a significant challenge and an unexpected opportunity.

Insurance companies initially faced mounting pressure as operational costs skyrocketed alongside fuel prices, affecting everything from vehicle maintenance for field operations to the increased cost of goods and services that directly impacted claim settlements. However, this challenge coincided with a surge in demand for comprehensive insurance coverage as businesses and individuals sought to protect themselves against the increased volatility and uncertainty in the economic environment. Motor insurance premiums naturally adjusted upward to reflect the new reality of higher vehicle operating costs, while property insurance became increasingly valuable as replacement costs rose across the board.

The parallel decision to float the naira has perhaps been even more transformative for the insurance sector than fuel subsidy removal. The currency’s adjustment to market realities created immediate challenges for insurance companies with foreign reinsurance obligations, as their costs in naira terms increased substantially. The naira’s depreciation by approximately 40.9% has particularly impacted the cost of foreign currency-denominated policies, leading to significant inflation in overall insurance revenue as companies adjust their pricing structures to reflect the new economic reality. Yet this same policy has attracted significant foreign investment into Nigeria’s financial sector, with international insurance and reinsurance companies showing renewed interest in establishing or expanding their Nigerian operations. The increased transparency in foreign exchange allocation has eliminated many of the bureaucratic bottlenecks that previously hindered international business relationships in the insurance sector.

Insurance companies have been compelled to implement comprehensive premium rate adjustments to reflect the prevailing economic conditions, ensuring they can adequately cover rising operational costs and claims payouts in an inflationary environment. These adjustments have been necessary not merely for profitability but for the fundamental survival of insurance companies operating in an economy where input costs have risen dramatically across all sectors. The enforcement of compulsory insurance policies has contributed to the upward trajectory of premiums, as insurers seek to maintain financial stability amid persistent inflationary pressures that affect everything from office rent to staff salaries to the cost of imported equipment and technology.

The National Insurance Commission has played an increasingly active role in regulating premium adjustments throughout this period, working to balance the legitimate needs of insurance companies to maintain financial stability with consumer protection concerns in an environment where rising costs of living make insurance coverage increasingly challenging for many Nigerians to afford. This regulatory oversight has become more sophisticated and nuanced, recognizing that blanket restrictions on premium increases could undermine the sector’s stability while uncontrolled increases could make insurance inaccessible to the very populations it is meant to serve.

The administration’s focus on economic diversification has created new insurance opportunities in previously underdeveloped sectors, while simultaneously addressing critical issues affecting Nigeria’s pension systems that directly impact millions of citizens and their families. President Tinubu’s administration has demonstrated particular attention to pensioners under both the defined benefit scheme managed by the Pension Transitional Arrangement Directorate and the contributory pension scheme operating under the National Pension Commission’s oversight. The economic reforms, while creating adjustment challenges, have also generated increased government revenues that have enabled more consistent pension payments and reduced the backlog of outstanding obligations that had accumulated over previous years.

The Federal Ministry of Finance has played a pivotal role in coordinating pension-related expenditures and ensuring that adequate budgetary provisions are made for both current pension obligations and the servicing of accumulated arrears. Under the current administration, the Ministry has worked closely with PTAD to streamline payment processes and improve the regularity of pension disbursements, addressing long-standing grievances from retirees who had experienced irregular or delayed payments. However, the implementation of these improvements has not been without significant challenges, as pensioners under the Defined Benefit Scheme have raised serious concerns over persistent delays in monthly pension payments by the Pension Transitional Arrangement Directorate, alleging systemic inefficiencies and possible corruption within the agency that have undermined the administration’s efforts to provide reliable pension services.

For over five years, pensioners have reportedly endured delays of up to a week or more in receiving their pensions, contrary to a presidential directive issued in 2019 by former President Muhammadu Buhari mandating payments by the 28th of each month. Despite assurances from PTAD, payments to pensioners now occur after the 30th of each month and sometimes extend into the following month, with PTAD attributing these delays to technical issues with Nigeria’s Government Integrated Financial Management Information System. These persistent technical problems have created additional layers of frustration for pensioners who had hoped that the current administration’s focus on systemic reform would resolve these longstanding operational challenges.

The delays have caused undue hardship for pensioners, many of whom rely entirely on these funds for basic needs such as food and medicine, creating situations where elderly retirees must borrow money or depend on family assistance simply to survive while waiting for payments that are rightfully theirs. Beyond payment delays, pensioners have accused PTAD of making illegal deductions from their pensions for union dues, which they argue violate constitutional rights to freedom of association. These deductions reportedly resumed in September 2024 after being halted in 2017 due to disputes among union executives, adding another layer of controversy to an already troubled pension administration process.

Perhaps most concerning are allegations that accrued arrears amounting to huge  billions remain unpaid, with pensioners expressing suspicions that these funds may be held in fixed deposits to generate interest for personal gains rather than being distributed to rightful beneficiaries who desperately need these resources. These allegations have prompted pensioners to call directly on President Bola Ahmed Tinubu to investigate PTAD thoroughly and address these issues as part of his Renewed Hope Agenda, viewing presidential intervention as necessary to resolve problems that have persisted across multiple administrations.

The exclusion of pensioners from seven defunct agencies, including NICON Insurance and NITEL/MTEL, from the ₦32,000 palliative payment and pension adjustment increments has created particularly acute difficulties for some of the most vulnerable retirees in the system. These pensioners, many of whom worked for decades in organizations that were once considered stable pillars of Nigeria’s economic infrastructure, now find themselves among the most marginalized groups in the pension system, facing the dual burden of irregular payments and exclusion from relief measures that could provide some respite from the harsh economic realities of the current adjustment period.

The combination of high inflation, delayed payments, and exclusion from palliative measures has created a perfect storm of challenges that have prevented many retirees from enjoying their retirement years as they had hoped and planned. The rising cost of medical care, in particular, has become a source of severe distress for elderly pensioners who face increasing health challenges precisely when their fixed incomes have been eroded by inflation and their access to timely payments has been compromised by technical and administrative difficulties.

The human cost of these systemic challenges extends beyond financial hardship to encompass genuine life-and-death consequences, as some retirees have tragically lost their lives during this period of economic hardship, unable to afford essential medical care or maintain the standard of living necessary for healthy aging. These losses represent not just personal tragedies for families but also a broader failure of the social contract that promised these workers security in their retirement years after decades of faithful service to the nation.

The National Salary, Income and Wages Commission has contributed significantly to pension system improvements by conducting comprehensive reviews of pension structures and recommending adjustments that reflect the current economic realities facing retirees. The Commission’s work has been essential in ensuring that pension calculations properly account for the impact of currency devaluation and inflation on retirees’ living standards, leading to more equitable treatment of pensioners across different categories and employment histories.

The Accountant General’s Office has modernized its pension processing systems during this period, implementing digital platforms that have reduced processing delays and improved transparency in pension administration. These technological improvements have been crucial in managing the complex transition between different pension schemes while ensuring that retirees receive accurate and timely payments regardless of which system governs their particular circumstances.

The Central Bank of Nigeria has facilitated these pension system improvements through its monetary policy framework and banking system oversight, ensuring that pension payments flow efficiently through the financial system and reach beneficiaries without unnecessary delays or complications. The CBN’s role has been particularly important in managing the foreign exchange implications of pension payments, especially for retirees with international banking arrangements or those requiring foreign currency transactions for medical or other essential needs.

These pension system improvements have created ripple effects throughout the insurance sector, as more reliable pension payments have enabled retirees to maintain insurance coverage that might otherwise have lapsed due to financial constraints. The increased certainty around pension income has also made retirees a more attractive market segment for insurance companies developing products specifically designed for older populations, including health insurance supplements and long-term care coverage that complement existing pension benefits.

Manufacturing sector revival, another cornerstone of the Tinubu administration’s economic strategy, has similarly benefited the insurance industry while creating opportunities to address pension-related challenges through increased employment and economic activity. As local production becomes more competitive due to currency adjustments and policy support, manufacturing companies have expanded their operations and correspondingly increased their insurance needs, while also contributing more substantially to the contributory pension scheme through increased employment and higher contribution levels. Industrial insurance, covering everything from machinery breakdown to business interruption, has experienced substantial growth as companies invest in expanding and modernizing their facilities to take advantage of improved market conditions.

The strengthened collaboration between PENCOM and various insurance companies has also created new opportunities for pension-linked insurance products that provide additional security for contributors to the contributory pension scheme. These hybrid products combine pension accumulation with life insurance coverage, offering participants enhanced protection for their retirement planning while generating new business opportunities for insurance companies seeking to diversify their product portfolios in response to evolving market demands.

The technology sector’s continued expansion under Tinubu’s administration has created entirely new categories of insurance demand. Cyber insurance, previously a niche product in the Nigerian market, has become increasingly mainstream as businesses digitize their operations and face growing cybersecurity threats. Professional indemnity insurance for technology companies has also expanded significantly as the sector matures and faces more sophisticated liability exposures.

However, the insurance industry’s growth during this period has not been without significant challenges. The adjustment period following major economic reforms created cash flow pressures for many businesses, leading to some companies reducing their insurance coverage or seeking less comprehensive policies to manage costs. Insurance companies have had to balance the need to maintain adequate coverage for their clients with the reality that many businesses are operating under tighter financial constraints than in previous years. Despite these affordability challenges, the industry has demonstrated remarkable resilience through aggressive marketing strategies and increased adoption of technology in product distribution, helping insurers maintain revenue growth even as individual consumers and businesses face mounting cost pressures.

The deployment of digital platforms and mobile technology has become increasingly critical for insurance companies seeking to maintain market share while managing the cost implications of traditional distribution methods. These technological innovations have enabled insurers to reach previously underserved markets more efficiently while reducing operational costs, though the challenge remains significant for consumers who find it increasingly difficult to afford coverage due to the rising cost of living across all sectors of the economy.

Regulatory developments under the Tinubu administration have also shaped the insurance landscape in meaningful ways, with the most significant being the Insurance Sector Reform Bill that has successfully passed both chambers of the National Assembly and now awaits the President’s assent. This landmark legislation represents a comprehensive approach to modernizing Nigeria’s insurance sector, introducing higher capital requirements for insurance firms that aim to strengthen the industry’s foundation and enhance consumer protection mechanisms. The anticipation surrounding Tinubu’s expected approval of this reform bill has created an atmosphere of optimism among industry stakeholders, who view it as essential for providing a more robust regulatory framework that will encourage both domestic and foreign investment in the sector.

The reform bill’s emphasis on stronger capitalization requirements reflects the administration’s understanding that a well-capitalized insurance sector is fundamental to economic stability and growth. By raising the bar for entry and operation in the insurance market, these regulatory changes are expected to eliminate weaker players while strengthening those companies committed to long-term sustainability and professional excellence. This consolidation effect, while potentially challenging for some existing operators, promises to create a more reliable and trustworthy insurance environment that better serves Nigerian consumers and businesses.

Complementing these structural reforms is the administration’s Renewed Hope Agenda, which has placed particular emphasis on expanding health insurance coverage as a cornerstone of social and economic development. The government has established ambitious targets to dramatically increase enrollment rates while simultaneously improving the quality of care provided through the National Health Insurance Authority. This initiative represents more than just healthcare policy; it embodies a recognition that accessible health insurance is fundamental to economic productivity and social stability.

The National Health Insurance Authority has been revitalized under Tinubu’s leadership, with new mandates to extend coverage to previously underserved populations and improve service delivery standards. These efforts align seamlessly with broader economic policies aimed at fostering financial inclusion and ensuring that insurance plays a more significant role in Nigeria’s overall development strategy. The expansion of health insurance coverage has created substantial new market opportunities for insurance companies while simultaneously reducing the financial burden on families and businesses when health emergencies arise.

The administration’s infrastructure development initiatives have created substantial opportunities for construction and engineering insurance. Major projects in transportation, power generation, and telecommunications have required sophisticated insurance coverage, often involving international syndicates and complex risk-sharing arrangements. These large-scale projects have not only provided immediate business opportunities for insurance companies but have also enhanced their technical capabilities and international relationships.

Regional economic integration efforts under Tinubu’s leadership have opened new avenues for Nigerian insurance companies to expand beyond national borders. The strengthening of economic ties with other West African nations has created opportunities for cross-border insurance business, particularly in areas such as trade credit insurance and transportation coverage for regional commerce.

The social impact of Tinubu’s economic policies has also influenced insurance market development. As income inequality initially widened during the adjustment period, there has been increased focus on microinsurance products designed to serve lower-income populations. This market segment, while challenging from a profitability standpoint, represents significant long-term growth potential as the economy stabilizes and these populations build greater financial resilience.

Looking toward the remainder of Tinubu’s second term and beyond, the insurance industry’s trajectory appears increasingly positive despite the challenging adjustment period. The fundamental economic reforms have created a more sustainable foundation for long-term growth, even if the short-term disruption was significant. 

Evaluating President Tinubu’s performance in transforming Nigeria’s insurance industry over his first two years in office warrants a balanced assessment that acknowledges both remarkable achievements and persistent challenges. A comprehensive rating of his administration’s impact on the insurance sector yields approximately 6.5 out of 10, reflecting a moderately successful tenure with significant potential for future improvement. This rating emerges from careful consideration of the administration’s substantial structural reforms weighed against implementation challenges that have affected ordinary Nigerians’ ability to access and afford insurance coverage.

However, the factors limiting this rating to 6.5 rather than a higher score reflect genuine concerns about the immediate impact of necessary but painful economic reforms on ordinary citizens and pensioners. The administration’s bold currency reform and subsidy removal policies, while economically sound in the long term, have created significant affordability challenges that have made insurance coverage less accessible precisely when comprehensive protection has become more critical than ever.

The 40.9 percent naira depreciation and fuel subsidy removal have inflated insurance premiums during a period when citizens can least afford additional financial burdens, creating a challenging paradox where the sector’s quality, stability, and international competitiveness have improved substantially while accessibility has decreased for many Nigerian families and businesses struggling with the broader economic adjustment.

Perhaps most concerning for the overall assessment are the persistent challenges in pension administration that directly impact the insurance ecosystem and reflect broader governance implementation gaps. The ongoing PTAD delays in pension payments, the exclusion of pensioners from defunct agencies including NICON Insurance and NITEL/ MTEL and others from relief measures, and the serious allegations surrounding huge billions in unpaid pension arrears represent significant governance failures that undermine confidence in financial sector management and affect the very populations that insurance products are meant to protect.

The rating of 6.5 out of 10 acknowledges that President Tinubu’s administration has successfully laid solid foundations for a more robust, internationally competitive insurance sector through comprehensive regulatory modernization, strategic capital strengthening requirements, and thoughtful long-term planning that addresses historical weaknesses in the Nigerian insurance landscape. The structural reforms implemented during his tenure represent genuine progress toward creating an insurance sector capable of supporting national development goals while providing meaningful protection to citizens and businesses.

Nevertheless, the administration must better balance its reform ambitions with immediate consumer needs and governance effectiveness to achieve its full potential in transforming Nigeria’s insurance landscape. The challenge moving forward lies in ensuring that the impressive structural improvements translate into tangible benefits for ordinary Nigerians while maintaining the momentum of regulatory and market development that has characterized these transformative first two years in office.