•Regulator insists on the deadline
•Some insurers contemplate cutting down
Because the July 31 deadline given to insurance coverage firms to satisfy the recapitalisation requirement attracts close to, indications have emerged that a few of them might fail to scale by.
There are three reinsurance firms within the insurance coverage sector, 29 basic insurance coverage firms, and 14 life insurance coverage firms in addition to 12 composite firms.
The variety of insured individuals within the nation is about 5 million. Whereas many corporates are additionally insured.
Following the signing of the Nigerian Insurance coverage Trade Reform Act, 2025 (NIIRA 2025), insurance coverage corporations had been mandated to shore up their working capital.
Life insurance coverage corporations are mandated to shore up their working capital from N2 billion to N10 billion. Normal insurance coverage corporations are to boost theirs from N3 billion to N15 billion. Reinsurance corporations are to shore up their capital from N10 billion to N35 billion.
Investigations by Vanguard additionally revealed that some firms are contemplating jettisoning both their life insurance coverage or basic insurance coverage enterprise segments in a bid to suit right into a decrease capital threshold.
This got here because the Nationwide Insurance coverage Fee, NAICOM, final week, held a strategic assembly with about 12 insurance coverage firms mentioned to be largely immobile within the ongoing recapitalisation drive.
Vanguard learnt that on the assembly, NAICOM reiterated that the July 31, 2026 deadline wouldn’t be prolonged.
Talking in the course of the assembly, the Commissioner for Insurance coverage, Mr. Segun Omosehin, directed the affected firms to reveal the challenges slowing down their recapitalisation efforts and provided steering on how they may scale by.
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Omosehin additionally charged the corporations to accentuate their momentum, warning that any firm that fails to conform dangers deregistration by August this 12 months.
In the meantime, additional Vanguard investigations point out that a number of the firms concerned could also be compelled to drop sure enterprise strains to outlive.
In a single occasion, an organization that attended the strategic assembly following NAICOM’s warning has reportedly resolved to close down its life insurance coverage arm and focus solely on the final insurance coverage section as a part of efforts to satisfy the recapitalisation requirement.
It is going to be recalled that amongst firms which have approached the NGX for capital elevating embrace Guinea Insurance coverage looking for for N5.8 billion by rights subject, Linkage Assurance looking for for N16.3 billion supply, Lasaco Assurance looking for to boost N18.47 billion, SUNU Assurance for N9.34 billion, Sovereign Belief looking for N5.02 billion and Common Insurance coverage looking for to boost N15 billion.
In the meantime, Omosehin mentioned that at least 20 insurance coverage corporations have formally written to the Fee on their recapitalisation efforts informing the Fee that they had been prepared for verification.
He mentioned given this info, his workplace had assigned verifiers to look into their books and report again to his workplace inside a timeframe of three weeks.
Based on him, it goes past his energy as insurance coverage commissioner to increase the deadline as a result of it was acknowledged by the Nigeria Insurance coverage Trade Recapitalisation Act, NIIRA 2025, and can’t be shifted by any authority besides with the modification of the legislation.
Trade analysts say the looming deadline is prone to set off a wave of mergers and acquisitions, as weaker corporations search lifelines from stronger gamers fairly than face outright exit. They famous that whereas consolidation might strengthen the sector’s capital base, it might additionally scale back competitors within the quick time period. Nevertheless, they argued {that a} extra strong and better-capitalised trade would finally improve public confidence and enhance the capability of insurers to underwrite large-ticket dangers.
Market operators additionally expressed concern over the gradual tempo of capital elevating, citing harsh macroeconomic situations, excessive rates of interest and investor apathy as main constraints.
Based on them, many insurance coverage corporations are struggling to draw recent fairness attributable to low returns traditionally related to the sector. This, they mentioned, has made rights points and public provides much less interesting, forcing some firms to discover different funding choices, together with non-public placements and strategic partnerships.
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