‎Informal sector holds growth key for pension, insurance sectors – Amolegbe

‎The potential of the informal sector in unlocking the growth of insurance and pension sectors has been emphasised.

Olatunde Amolegbe, managing director/CEO, Arthur Stevens Asset Management Limited who spoke at the 10th Annual Conference of the Nigerian Association of Insurance Editors held in Lagos with the theme: ‘Strengthening Pension and Insurance Framework for Better Economy” challenged operators in both sectors to come up with strategies that will bring the informal sector under insurance and pension coverage.

‎ Amolegbe noted that the low participation of informal workers continues to hinder the expansion and deepening of financial services such as pensions and insurance, which are crucial for long-term economic stability and individual financial security.

‎He identified the two sectors as key sub-sectors of the financial services industry of the economy that have capacity to accumulate long term investible funds.

‎He however, regretted that both sectors for years, have been suffering from under development due to lack of public confidence and trust as well as poor awareness of the value of the sectors on the part of the public.

‎Highlighting the underdeveloped nature of the two sectors, Amolegbe said pension and insurance coverage remained low, observing that only 26.3 percent of Nigerian workers had access to pension plan and health Insurance in 2023 largely due to the high number of informal sector workers in the country.

‎“Approximately 92 percent of Nigeria’s employed population works in the informal sector, voluntary Micro pension scheme adoption has been low as of December 2024. Micro pension registration was barely 172.936, six years after the introduction of the scheme, for the inclusion of the informal sector”.

‎On insurance performance he said “Nigeria’s insurance penetration remains largely low at less than 1.0 percent compared to South Africa ‘s 11.54 percent, Namibia’s 7.41 percent Morocco’s 4.10 percent, Kenya’s 2.25 percent and the global average of 6.8 percent,” he observed.

‎To address the problem, he said the operators’ first step towards capturing the informal sector into insurance and pension fold was to rebuild their confidence and trust towards the sector.

‎He said this was necessary because without regaining their confidence they could not be captured into pension and insurance nets because they would not want to put their money where they could not easily access it.

‎”Operators of the two sectors must device simple and different system of enrolling the informal sector operators into the system using modern technology, begin to think how to establish micro PFAs and operate such firms in areas where micro people live; use the opportunity of publicity created by the NIIRA 2025 to promote financial literacy among young Nigerians and make people have feelings for savings through insurance and pensions, he said.

‎Highlighting statistics on the performance of the two sectors between 2020 and 2024, Amolegbe said, “The pension and insurance sectors have recorded substantial growth, positioning them as critical pillars for economic stability and capital market deepening. Total pension assets reached over N23 trillion in 2025, equivalent to approximately 8.6 percent of GDP.

‎He noted that the insurance industry achieved a 56 percent increase in gross written premiums in 2024, reaching N1.562 trillion, with the non-life segment accounted for N1.1 trillion, the life segment accounted N470 billion. Industry assets on the other hand rose by 46.1 percent to N3.9 trillion, while market capitalisation climbed 41 percent to N1.2 trillion.