The Effectiveness of Compulsory Insurance Schemes in Expanding Nigeria’s Insurance Market

This study evaluates the effectiveness of compulsory insurance schemes in expanding overall insurance market penetration in Nigeria. Nigeria's insurance regulatory framework mandates several classes of insurance, including third-party motor, employers' liability, public liability for certain establishments, and group life for employees, as instruments for broadening coverage. However, enforcement inconsistencies and public non-compliance have limited the market expansion potential of these mandates. This research employs a policy evaluation design using secondary data from NAICOM annual industry reports, compliance statistics from the Nigeria Police Force and Federal Road Safety Corps, and premium income records disaggregated by mandatory insurance class from 2018 to 2023. Document and content analysis are applied alongside descriptive statistics to assess trends in mandatory class premium income, compliance rates, and enforcement action frequency. The study also examines cross-country comparisons with Kenya and South Africa where mandatory insurance enforcement has demonstrably contributed to market growth. Preliminary findings are expected to indicate that enforcement failures are the primary constraint on compulsory insurance effectiveness in Nigeria. The study recommends a National Mandatory Insurance Enforcement Framework coordinated across NAICOM, law enforcement agencies, and relevant ministries. Keywords: Compulsory Insurance, Market Penetration, Enforcement, NAICOM, Insurance Policy.