Nigeria’s insurance sector has been urged to strengthen its risk management strategies and product offerings as the United States imposes a 15 per cent tariff on Nigerian exports, effective August 2025.
The tariff increase, implemented through President Donald Trump’s July 31 executive order modifying America’s reciprocal tariff system, places Nigeria among approximately 40 countries facing penalties for what Washington considers an “unbalanced” trade relationship.
Speaking on the development, an insurance expert and public affairs analyst, Mr. Ade Adesokan, emphasised that this significant trade policy shift comes at a time when Nigeria’s insurance sector has demonstrated remarkable growth and resilience.
“The sector must now adapt strategically to maintain its impressive growth trajectory while supporting Nigerian exporters through this period of trade uncertainty,” Adesokan stated.
The current 15 per cent tariff represents an escalation from the 14 per cent tariff initially imposed in April 2025, which was suspended for 90 days and extended for an additional month to allow for negotiations. Under the new structure, countries with which the U.S. has a trade deficit face a default 15 per cent duty on all goods entering American borders, while nations with a U.S. trade surplus pay a lower 10 per cent rate.
Nigeria, which has bilateral trade relations with the U.S., now faces additional trade complications. The situation could worsen further, as President Trump has threatened an additional 10 per cent tariff on countries aligning with BRICS policies. Nigeria’s recent admission as the ninth BRICS partner country in January 2025 could potentially raise total tariffs to 25 per cent.
The Nigerian insurance market has demonstrated exceptional resilience, recording about N1.56tn in the 2024 financial year, a 56 per cent rise from N1.00tn in the previous year, led by the non-life insurance business. Non-life business accounted for N1.1tn, while life business generated N470bn. The industry’s total assets expanded significantly to N3.9tn, a 46.1 per cent rise from N2.67tn in 2023. Market capitalisation also grew substantially, reaching N1.2tn, a 41 per cent increase from N850bn in 2022. The industry paid about N622bn in claims, with the non-life segment accounting for N437bn and the life segment for N185bn.
Adesokan identified several insurance segments facing immediate impact from the tariff increase. He said marine insurance would be one of the most immediately affected lines of business, as “marine insurance providers covering goods in transit will need to reassess pricing models as exporters may reduce shipment frequencies or consolidate cargo to manage the additional 15 per cent cost burden.
“Trade Credit Insurance: This specialised coverage, protecting businesses against non-payment from buyers, may experience increased demand as exporters seek financial safeguards against heightened U.S. market uncertainty. Simultaneously, insurers anticipate potential claim increases if Nigerian exporters’ American customers delay payments or cancel contracts due to absorbed tariff costs. Property and Casualty Insurance: Manufacturing facilities and agricultural processing plants tied to U.S. exports may reconsider asset utilisation and expansion plans, requiring insurers to revisit property valuations and coverage limits.
“Business Interruption Insurance: Nigerian businesses heavily reliant on U.S. export markets may face operational disruptions or reduced revenue streams, potentially triggering claims under business interruption policies.”
He noted that the tariffs may accelerate Nigeria’s existing trend toward export diversification, carrying significant implications for the insurance industry.
“As exporters explore alternative markets beyond the United States, insurers must develop expertise in assessing risks associated with new trade corridors and destination countries. This geographical diversification of risk may ultimately benefit insurers through portfolio spread, though it requires investment in market intelligence and risk assessment capabilities for new territories,” Adesokan explained.
He also called on the National Insurance Commission, the Nigerian Insurers Association, and the Nigerian Council of Registered Insurance Brokers to play essential roles in monitoring the situation and providing appropriate guidance to the industry.
“Regulatory flexibility may be necessary to allow insurers to innovate in response to changing market conditions while maintaining adequate consumer protections and financial stability,” he concluded.
