Insurance market shrinks to 8 composite firms as 2030 separati....

Nigeria’s insurance industry is entering a new phase of consolidation, with the number of composite insurers now down to eight as operators restructure their businesses ahead of a 2030 deadline to separate life and non-life operations under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.

The eight companies currently licensed as composite insurers by the National Insurance Commission (NAICOM) are AIICO Insurance, AXA Mansard Insurance, Cornerstone Insurance, Fortis Global Insurance, Great Nigeria Insurance, Industrial and General Insurance (IGI), Lasaco Assurance and Leadway Assurance.

The shrinking number of composite operators follows the sector’s recently completed recapitalisation exercise, which has significantly raised the capital threshold for insurance companies and triggered a wider restructuring of the market.

Under Section 15 of NIIRA 2025, a non-life insurer must have minimum capital of N15 billion, while a life insurer requires N10 billion. This effectively places a N25 billion minimum capital requirement on an operator seeking to maintain both lines as separate businesses.

The law also ends the long-standing model under which a single composite licence allowed one company to operate both life and general insurance businesses. Section 6 requires existing composite insurers to comply with the new licensing structure within five years of the Act’s commencement.

With President Bola Tinubu signing the Act on July 31, 2025, the transition period runs to 2030.

The reform means existing composite insurers must either establish separately licensed life and non-life companies, or decide to concentrate their capital and management resources on one side of the market.

That decision has significant economic implications because it could reshape competition, capital allocation and risk-taking across Nigeria’s insurance industry.

NAICOM’s completed recapitalisation exercise has already strengthened the sector’s financial base. The commission said 43 insurance and reinsurance companies initially met the new minimum capital requirements, with additional firms undergoing final verification, while the exercise attracted fresh investment and strengthened operators’ capacity to underwrite larger risks.

The commission has also moved into the next stage of reform by preparing to implement a risk-based capital framework, which will link the amount of capital insurers hold more closely to the risks they underwrite.

For insurers, the separation requirement could increase operating costs in the short term because separate entities will require their own boards, management structures, capital and regulatory systems. But it could also allow companies to specialise, improve risk management and allocate capital more efficiently between long-term life business and shorter-duration general insurance.

The restructuring is already producing exits and changes in the market. NAICOM has confirmed that several insurance licences were cancelled after operators failed to meet recapitalisation requirements, while some operators have undergone other forms of restructuring.

The broader objective is to build insurers with enough financial strength to absorb larger risks, settle claims promptly and provide coverage for increasingly capital-intensive sectors such as infrastructure, energy, aviation and manufacturing.

For Nigeria’s economy, the importance of the reform goes beyond the number of insurers remaining in the market. A better-capitalised and more specialised insurance industry can support investment by providing stronger risk protection, mobilising long-term funds and reducing the financial vulnerability of businesses and households.

The real test before 2030 will therefore be whether the restructuring produces fewer but stronger insurers capable of expanding coverage, underwriting larger economic risks and restoring public confidence in insurance as a financial safety net.