Nigeria: Recapitalisation Fuels Insurance Sector’s GDP Growth to 20.78%

Nigeria’s ongoing insurance sector recapitalisation has emerged as a key catalyst for the strong real GDP growth recorded in Q3 2025, according to new data from the National Bureau of Statistics (NBS).

The insurance subsector posted real GDP growth of 20.78%, outperforming the 15.70% recorded in the previous quarter and marking its highest performance in over six quarters, where growth consistently stayed below 10%.

A research note by non-bank lender Credit Direct highlighted recapitalisation as the primary driver of this rebound, noting that the reforms continue to strengthen balance sheets and boost sector activity.

NBS data also shows that, at Current Basic Prices, the insurance subsector contributed ₦398.17bn in Q3—lower than Q2’s ₦554.07bn but significantly above Q1’s ₦267.30bn. With a cumulative ₦1.22tn already recorded, the industry has surpassed its full-year 2024 performance of ₦1.18tn.

Overall, finance and insurance grew by 40.55% year-on-year in nominal terms, with financial institutions expanding by 41.80% and insurance by 32.44%. In real terms, the sector grew by 19.63%, up 15.29 percentage points from Q3 2024. Quarter-on-quarter, however, real growth slowed by 8.42%.

The sector contributed 2.65% to real GDP—above the 2.30% recorded in Q3 2024, though lower than the 3.23% posted in Q2 2025.

Ebelechukwu Nwachukwu, MD/CEO of Rex Insurance, attributed the growth to increased economic activity across construction, trade, real estate, and oil and gas. According to her, “Insurance responds to economic growth, and as transactions rise—from engineering to infrastructure—the demand for insurance naturally follows.”

She added that improved claims payments, strengthened by better data management and customer consent protocols, are rebuilding public confidence. Technology adoption has also accelerated uptake, enabling customers to buy policies and submit claims digitally with greater ease. Increased industry visibility and awareness campaigns are further deepening market engagement.

Similarly, Stephen Alangbo, MD/CEO of Cornerstone Insurance Plc, noted that anticipation around recapitalisation stimulated investor interest as early as Q2, with expectations materialising in Q3. He highlighted strengthened capital bases, rising profitability, and improved trust as key drivers behind surging insurance stock prices and sector contribution.

Nigeria’s broader economy grew by 3.98% in Q3 2025—slightly above the 3.86% recorded in the same period last year but below the 4.23% in Q2 2025.