With barely a month to the July 31 recapitalisation deadline set by the National Insurance Commission, NAICOM, only 25 of Nigeria’s over 58 licensed insurance companies have submitted applications to appointed auditors for capital verification.
The development has raised fresh concerns over the readiness of many operators to meet the new regulatory capital requirements under the Nigerian Insurance Industry Reform Act, NIIRA, 2025.
So far, at least eight insurance companies have approached the capital market to raise fresh funds, while several others are exploring mergers, acquisitions and strategic investments to avoid the risk of losing their operating licences.
Industry estimates suggest that insurers collectively need close to ₦1 trillion in fresh capital to meet the new thresholds.
Under the NIIRA 2025 framework, life insurance companies are required to raise their minimum paid-up capital from ₦2 billion to ₦10 billion, while non-life insurers must increase theirs from ₦3 billion to ₦15 billion.
Composite insurers are expected to raise their minimum capital to ₦25 billion, while reinsurance companies are required to meet a new threshold of ₦35 billion.
The transition window for existing operators is now nearing its end, with NAICOM insisting that the July 31 deadline remains unchanged.
This is despite concerns from industry experts who argue that an extension may be inevitable, given the slow pace of capital mobilisation and the difficult economic environment.
Operators say insurers are seeking capital at a time when investors are still digesting the banking sector recapitalisation exercise, during which banks raised about ₦4.65 trillion to meet new paid-up capital requirements.
Unlike banks, which were given 24 months to comply, insurance companies were given one year.
Already, at least three operators have indicated readiness for recapitalisation by depositing 10 per cent of their required capital into the Central Bank of Nigeria-managed Policyholders’ Protection Fund, as required by NAICOM.
However, most underwriters are still under pressure, with many considering merger and acquisition options.
Industry sources say negotiations are stalled in several cases due to valuation disputes, governance concerns, investor caution and uncertainty over future regulatory treatment.
The recapitalisation exercise is being described by stakeholders as a defining moment for the future structure, stability and competitiveness of Nigeria’s insurance industry.
However, the process is being complicated by years of poor corporate governance, late and irregular filing of financial statements, weak underwriting discipline, poor claims management and low insurance penetration, estimated at less than one per cent.
There are also fears that some companies may be forced to downsize or restructure if they fail to attract fresh capital, raising concerns over possible job losses across the sector.
Multiple sources close to NAICOM said the regulator remains determined to fully implement the new capital regime.
Speaking at the EY Insurance Summit in Lagos, the Deputy Commissioner for Insurance, Finance and Administration, Usman Jankara, warned that expressions of interest would not be enough to save any operator.
According to him, only companies with verified and admissible capital will retain their operating licences after the deadline.
He identified persistent challenges facing the sector to include complex merger and acquisition processes, macroeconomic volatility affecting capital raising, and capacity gaps in underwriting and risk management.