NAICOM completes insurance recapitalisation as 43 firms meet...

Nigeria’s insurance industry has completed its most extensive recapitalisation exercise in more than two decades, with 43 insurance and reinsurance companies meeting the new minimum capital requirements introduced under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, according to the National Insurance Commission (NAICOM).

The Commission disclosed that another eight insurance companies which submitted evidence of compliance shortly before the statutory deadline are undergoing final regulatory verification, with the exercise expected to be concluded within 14 days.

NAICOM said the recapitalisation programme, which lasted about one year, marks a major restructuring of the insurance industry and is expected to strengthen operators’ financial capacity, improve claims settlement, deepen public confidence and position the sector to finance larger infrastructure and investment projects.

According to the Commission, the exercise was implemented pursuant to Section 15 and other relevant provisions of the Nigerian Insurance Industry Reform Act 2025, signed into law by President Bola Tinubu on July 31, 2025, as part of broader financial sector reforms aimed at supporting Nigeria’s ambition of building a $1 trillion economy by 2030.

NAICOM said it developed a structured transition programme supported by detailed guidelines covering minimum capital requirements, eligible capital instruments, admissible assets, verification procedures, reporting obligations and supervisory expectations to ensure transparency and regulatory certainty throughout the exercise.

The Commission described the successful completion of the recapitalisation programme as a defining milestone in the transformation of Nigeria’s insurance industry, saying it lays the foundation for a stronger, more resilient and better-governed sector capable of supporting economic growth, expanding financial inclusion and mobilising long-term investment capital.

It added that the higher capital base has improved the financial resilience of insurance companies, attracted fresh domestic and foreign investment, restored investor confidence and enhanced operators’ capacity to underwrite larger and more complex risks across strategic sectors of the economy.

According to NAICOM, the stronger capitalisation will also improve insurers’ ability to settle policyholders’ claims promptly, absorb emerging risks and compete more effectively in regional and international insurance markets.

The Commission said the exercise provides a stronger platform for implementing its Risk-Based Capital Framework, under which regulatory capital requirements will be aligned with the nature, scale and complexity of each operator’s business, thereby strengthening prudential supervision and promoting a more sustainable insurance market.

NAICOM reaffirmed its commitment to protecting policyholders, promoting sound market conduct and accelerating insurance penetration through innovation, technology and digital transformation, adding that it would continue to provide updates on post-recapitalisation supervisory actions, ongoing verification of operators and other market development initiatives.

Industry analysts said the recapitalisation could reshape competition within the sector by creating stronger institutions with greater underwriting capacity, reducing reliance on foreign insurers for high-value risks, supporting infrastructure financing and increasing the insurance industry’s contribution to Nigeria’s long-term economic development.

Attention is now expected to shift to the verification outcome for the remaining eight companies, possible mergers and acquisitions among operators seeking stronger market positions and the extent to which the industry’s stronger capital base translates into higher insurance penetration, improved claims settlement and greater support for economic growth.