NIyi Jacobs
Insurance is increasingly emerging as a critical factor influencing both energy costs and business resilience in Nigeria, highlighting its often overlooked role in the country’s economic landscape.
At the Dangote Refinery, management recently shed light on how insurance contributes to the final price of fuel. The refinery’s Managing Director, David Bird, explained that the company purchases Nigerian crude oil from the government at international benchmark prices and must also pay global freight and insurance rates to transport the crude for refining.
These additional charges, he noted, add significant costs to the refining process before the products reach consumers. Industry analysts say insurance premiums for shipping and cargo often increase during periods of global uncertainty, geopolitical tensions, or supply disruptions, making energy logistics more expensive. Such costs are eventually reflected in domestic fuel pricing.
Beyond the energy sector, the importance of insurance has also been highlighted in Lagos following the fire outbreak at the Great Nigeria Insurance building on December 24, 2025. Since the incident, traders in Balogun Market have lamented the continued sealing of their shops and the barricading of surrounding access roads by the Lagos State Government as authorities carry out safety and structural assessments.
The restrictions have significantly disrupted business activities in one of Lagos’ busiest commercial hubs, leaving many traders struggling with losses and uncertainty about when they will be able to fully resume operations. The situation has renewed conversations around the importance of adequate insurance coverage for businesses, particularly in densely populated markets where fires and other disasters can quickly cause widespread damage.
Experts say stronger insurance adoption could help businesses recover faster from unexpected events while also stabilizing critical sectors such as energy and trade. However, Nigeria continues to record low insurance penetration, leaving many individuals and enterprises exposed to financial shocks when crises occur
