How Nigerian Insurance Companies Are Embracing the Digital Age
A New Era for Insurance in Nigeria
That gap between risk and readiness is exactly why Nigeria’s insurance sector is undergoing a digital revolution. If anything happens to some formal and informal businesses in Nigeria today, a lot of businesses would not come back up.
In this same country, over 220 million mobile connections exist, and people buy airtime and data in seconds from their phones, but less than 3% possess insurance policies.
From mobile apps to AI-driven claims, insurers are rethinking how they serve Nigerians. And with new 2025 financial and tax policies linking insurance to tax benefits, the change is becoming urgent and more rewarding.
Why the Shift is Urgent
Nigeria’s insurance penetration rate is under 3%, one of the lowest in Africa. For decades, the barriers and issues were the same:
- Long queues and paperwork
- Complicated policies
- Delayed or denied claims
- Limited awareness in rural and informal markets
- General mistrust of insurers
But now, with Nigerians with smartphones being above 55% and fintech reshaping finance, insurers know survival depends on going digital.
Technologies Transforming Nigerian Insurance
- Mobile Apps & USSD Codes
- Buy, renew, or claim insurance directly from your phone.
- Even non-smartphone users can access microinsurance with USSD codes for as little as ₦500/month.
- Example: MyCover.ai and Curacel offer low-cost plans accessible by USSD.
- Online Aggregators
- Platforms like CompareIN, Octamile, MyCover.ai let Nigerians compare prices instantly, it is like shopping on Jumia for insurance.
- Transparent pricing reduces suspicion and builds trust.
- AI & Chatbots
- Chatbots explain policy terms, update claims, and answer FAQs at any time.
- AI detects fraudulent claims and helps insurers profile risks more accurately.
- Blockchain for Trust
- Though still emerging, blockchain can secure records and trigger instant payouts.
- Big Data & Predictive Analytics
- Using mobile usage, payments, and even driving patterns, insurers can design more personalized policies.
- Example: ETAP’s pay-as-you-drive insurance rewards safe drivers with lower premiums.
InsurTech Startups Leading the Charge
- Curacel – AI-powered claims and fraud detection.
- ETAP – Usage-based car insurance with safe-driving rewards.
- MyCover.ai – Infrastructure for businesses and cooperatives.
- Octamile – Embedded insurance through APIs and fintech platforms.
These players are forcing traditional insurers like AXA Mansard and Leadway to innovate faster.
How Digital Insurance Benefits Nigerians
| Benefit | Everyday Example |
| Accessibility | Anyone can register via USSD in minutes. |
| Speed | A student submits claims via app, no paperwork. |
| Transparency | Traders track claim progress like parcel delivery. |
| Lower Costs | Digital platforms cut admin costs → cheaper premiums. |
| Personalized Cover | Uber drivers get pay-per-trip insurance instead of annual flat fees. |
Tying It to the 2025 Tax Laws
This is where it gets interesting. Nigeria’s 2025 Finance Act introduced provisions that directly support insurance adoption:
- Formal Workers: Premiums for life or health insurance are now tax-deductible. If you earn ₦300k monthly and pay ₦20k in health premiums, your taxable income reduces, meaning lower PAYE.
- Informal Workers & SMEs: Under new SME tax breaks, group microinsurance bought via cooperatives can qualify as part of formal financial reporting—giving access to cheaper loans and grants.
| Formal Worker | Informal Worker |
| Tax relief on premiums (PAYE reduced) | Cooperative microinsurance tied to tax filing lowers cost |
| Life & health premiums deductible | Proof of insurance → better chance of securing loans |
| Example: Abuja civil servant saves ₦60k yearly on PAYE | Example: Aba trader secures ₦200k microloan with insurance |
The Road Ahead: What to Expect in 5 Years
- Embedded Insurance: Comes bundled with services,buy a phone, get screen insurance.
- Fintech + Insurance: Platforms like OPay, PalmPay, and Flutterwave will sell insurance alongside payments.
- Wider Inclusion: More rural Nigerians onboarded through online finance .
- Smarter Risk Alerts: Insurers sending real-time safety tips based on location and activity.
Final Word
Insurance in Nigeria has entered its digital age. What used to be paperwork and queues is now apps, USSD codes, AI, and blockchain. And with 2025’s tax reforms, insurance can be a tool to save money and unlock financial opportunities.
Insurance today is faster, cheaper, and more rewarding than ever.
