The National Insurance Commission (NAICOM) has raised concerns over the rising capital flight from Nigeria health insurance, disclosing that multinational companies are responsible for nearly $2bn leaving the country annually through offshore health insurance arrangements for their employees.
This revelation was made by the Deputy Commissioner for Insurance (Finance and Administration), Ekerete Gam-Ikon, during the
Insurance Meets Tech 4.0 Conference held in Lagos. Industry stakeholders have now intensified calls for urgent reforms in Nigeria health insurance to retain capital, expand coverage, and strengthen local capacity.
Nigeria Health Insurance and Capital Flight Challenge
Gam-Ikon explained that many multinationals with operations in Nigeria prefer to insure their employees with international providers rather than utilizing domestic insurers.
This practice, he noted, has led to billions of dollars leaving Nigeria each year.
“You’ve got a lot of multinationals who are giving their employees health insurance, right?
We then discovered that in a year about $2bn goes into that from Nigeria.
They are doing the insurance with international providers. That’s how much spending goes out of Nigeria for health insurance,” he stated.
According to him, this trend undermines the development of Nigeria health insurance and contradicts provisions of the Nigerian Insurance Industry Reform Act, which mandates that local insurers must be given priority before foreign providers are considered.
Section 204 of the Act places health insurance under domestic insurance or reinsurance, requiring local capacity to be fully utilized before foreign arrangements are allowed.
Subsection 7 goes further to prohibit foreign or international health insurance providers from operating in Nigeria without NAICOM’s prior approval.
Violators risk penalties not less than the total premium involved.
This framework was designed to ensure that Nigeria health insurance remains competitive and beneficial to the economy.
However, enforcement challenges and the preference of multinationals for foreign insurers continue to drain capital that could have been invested domestically.
Beyond corporate health coverage, Gam-Ikon highlighted a growing debate on the need for more inclusive insurance policies in Nigeria.
He revealed that while the Independent National Electoral Commission (INEC) ensures its staff and equipment are insured during elections, voters remain uncovered.
“INEC ensured all their staff members, including ad hoc staff, have insurance. It is only voters who go out without insurance,” he said.
NAICOM is exploring partnerships to expand insurance penetration and address such gaps.
This points to the broader challenge of Nigeria health insurance, where millions of citizens still lack adequate coverage despite reforms and the establishment of the National Health Insurance Authority (NHIA).
The President of the Chartered Insurance Institute of Nigeria, Mrs. Yetunde Ilori, stressed that recent reforms, including higher capital requirements, could encourage insurance companies to invest more aggressively in health insurance.
“A number of HMOs do not directly come from the insurance sector; they are under NHIA.
But insurance companies own HMOs as subsidiaries, and I think it’s an area they want to deploy capital,” she said.
Ilori added that advances in technology and regulatory evolution could help overcome past challenges in Nigeria health insurance, such as moral hazards that made some firms abandon the sector in earlier years.
She also predicted a shift towards a co-payment system where Health Maintenance Organisations (HMOs) and traditional insurers would collaborate, creating a stronger and more sustainable healthcare financing structure.
Strengthening Nigeria’s Health Insurance Market
Industry experts argue that reversing the $2bn capital flight requires a two-pronged approach: stronger enforcement of local insurance laws and building trust in Nigeria health insurance providers.
For many multinationals, the choice of foreign insurers is driven by brand confidence, global reputation, and the perception that local insurers cannot meet international standards.
To counter this, Nigerian insurance companies must improve service delivery, transparency, and claims settlement processes.
At the same time, regulators must incentivize firms that utilize local health insurance providers and impose penalties on violators of the reform act.
Doing so will not only reduce capital flight but also create more jobs, deepen insurance penetration, and strengthen Nigeria’s healthcare system.
The revelation of a $2bn annual capital flight underscores both the opportunities and challenges within the Nigeria health insurance market.
With ongoing reforms, regulatory enforcement, and the adoption of technology-driven solutions, Nigeria can reposition its insurance sector as a reliable partner for both multinationals and local organizations.
Ultimately, plugging the gaps in Nigeria health insurance will not only conserve scarce foreign exchange but also provide stronger protection for Nigerian workers, families, and the broader society.
