Players in the insurance sector like Custodian and Allied Insurance Limited, AIICO Insurance Limited, Ideal Insurance Brokers Limited, Heirs Insurance and ARM Limited know opportunities when they see one. The amendment of the Pension Reform Act (PRA) in 2014 has thrown these firms at the forefront of a quiet revolution, driven by innovation, strategic investment in talent, and a willingness to push boundaries. The Pension Reform Act 2014 governs the Contributory Pension Scheme and replaced the 2004 Act.
As regulatory enforcement continues to evolve, forward-thinking players such as AIICO Insurance and Ideal Insurance Brokers limited stand to benefit greatly by aligning their services with the rising demands of compliance, accountability, and innovation.
The PRA 2014 has acted both as a catalyst and compass, steering insurance brokers toward a more modern, inclusive, and technology-driven future. Among its most impactful provisions was the mandatory Group Life Insurance policy for employees, requiring coverage of at least three times an employee’s annual total emolument. This significantly expanded the life insurance market and elevated brokers to essential intermediaries in facilitating compliance.
The President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Ayodapo Shoderu, emphasized the importance of this development: “The welfare of workers should be given priority by governments. The Pension Reform Act has mandated employers to take Group Life Assurance for their workers, noting that the step would increase the regime of benefits that could accrue to workers in retirement.
“Aside from the increased pension contributions on the part of the employers, the reform provides that an employer’s contribution under the Group Life should not be less than 20 per cent of the employee’s monthly emolument. In addition, a Group Life Insurance policy must be maintained in favour of the employee’s annual total emoluments similar to the old Act.
“The elimination of Letter of Administration for the processing of Group Life to beneficiaries of deceased workers is also a good idea that has made access to death benefits by dependents much easier than it was before.”
A changing industry landscape
This quiet revolution that has reshaped the Nigerian insurance landscape also marked a turning point in shaping the future of Nigeria’s workforce, aligning with the PRA’s vision as modernised under the Goodluck Jonathan administration to reform the earlier 2004 Act enacted under President Olusegun Obasanjo.
Another change is in helping to drive a definite future for the workforce in Nigeria as envisioned by the PRA 2014.
A player in the industry said: “We realised we couldn’t operate like it was 2005 anymore. Clients want speed, transparency, and convenience. And our staff want flexibility, purpose, and autonomy. We’re changing to meet both needs.”
The insurance leading the charge
The Custodian Investment Plc, like many forward-thinking financial institutions in Nigeria, reacted strategically and proactively to the Pension Reform Act (PRA) and established Crusader Sterling Pensions Limited.
Crusader Sterling Pensions limited, a leading PFA owned by these institutional investors: Custodian and Allied Insurance Plc, Custodian Trustees, WSTC Financial Services Limited, Ideal Insurance Brokers Ltd, Sterling Asset Management and Trust Ltd, and Crusader Sterling Staff Share Scheme was the first PFA to be assigned a Pension Fund Manager rating of “A” by Agusto & Co, Nigeria’s first Credit Rating Agency and a Pan African leader in credit ratings and credit reports.
In response to the Act, AIICO Insurance expanded its corporate advisory services, developing tailored group life packages for businesses seeking to comply with the law. The company also invested in digital onboarding and customer service portals, significantly cutting down processing times and reducing reliance on physical paperwork.
Internally, AIICO Insurance introduced performance-based systems and began training professionals specifically on pension-linked insurance schemes and regulatory advisory. This move empowered a new generation of insurance professionals who weren’t just sales agents, but consultants versed in statutory compliance, product design, and enterprise risk management.
AIICO Pension Managers Limited, a subsidiary of AIICO Insurance, which was established in 2005, specializes in managing pension funds for individuals and organizations, ensuring their retirement savings are invested and managed effectively.
The company’s early adaptation to the PRA’s demands positioned it as a leading provider for institutional clients across Nigeria, especially SMEs who were now required by law to insure their workforce but lacked internal HR/legal expertise.
For Ideal Insurance Brokers Limited, known for its expertise in the oil and gas, aviation and pension schemes of major government parastatals, the Act has opened new opportunities for growth, specialisation, and leadership within a regulated pension and insurance ecosystem.
Having managed high-profile national insurance projects such as the NigComSat-1 Satellite Launch, the Presidential Air Fleet, NNPC, NARSDA ,CBN and INEC, the foremost indigenous insurance brokerage firm identified the growth potential in the pension fund administration sector. In a strategic move, it invested in shares of Crusader Sterling Pensions Ltd, licensed by the National Pension Commission (PenCom).
The rationale behind Ideal Insurance Brokers’ investment in Crusader Sterling Pensions was rooted in a strategic vision to diversify its income beyond traditional brokerage commissions. By acquiring equity in a licensed Pension Fund Administrator, Ideal achieved vertical integration, gaining access to both the advisory (brokerage) and fund administration segments of the pension value chain. This move also enhanced the company’s influence over policy implementation and the overall client experience, positioning it as a more comprehensive player in the retirement benefits ecosystem.
Heirs Insurance Brokers is leveraging technology to make insurance more accessible to underserved demographics, particularly SMEs and informal workers, many of whom were newly impacted by the Pension Reform Act of 2014.
As the PRA expanded mandatory pension contributions and introduced stricter compliance around Group Life Insurance policies, a significant number of smaller enterprises found themselves navigating formal insurance for the first time. Heirs responded by launching tech-driven onboarding processes and simplified policy offerings tailored to this emerging market segment.
Through its digital platform, customers, especially small business owners—could purchase and manage Group Life and health policies entirely online. The company’s tech infrastructure enabled it to process client data to create real-time product customisations, ensuring coverage met both legal requirements and operational realities.
In-house, Heirs also embraced the workforce evolution spurred in part by regulatory complexity. The company invested in building a talent pipeline focused on regulatory advisory and digital compliance services, training young professionals in risk management, Insurtech strategy, and pension-linked insurance products.
Moreover, the firm’s workplace culture reflected the changing dynamics of the industry. Heirs encouraged remote collaboration, provided mental health support, and promoted agile teams that could work across legal, tech, and client service verticals to deliver comprehensive brokerage services for a new regulatory era.
For ARMS, it has stepped up its participation in the contributory pensions scheme by ensuring that its funds provide “a steady stream of income to investors by investing in high quality, short term money market instruments and government securities”.
It runs a micro pension unit through which it acts as advisors to high-net-worth clients to assist them in building and managing their wealth with their overall objectives in mind. It also manages investment mandates for institutional clients, including corporations, insurance companies, trusts, pension funds, and government agencies.
Despite these advancements, the industry faced challenges. Compliance with the PRA 2014 is inconsistent, particularly among private sector employers. A study highlighted that the contributory pension scheme had a positive but insignificant impact on the growth of the insurance industry’s premium base, citing reluctance by employers to fully comply with the Act’s provisions.
