•Regulator insists on the deadline
•Some insurers take into account cutting down
Because the July 31 deadline given to insurance coverage corporations to satisfy the recapitalisation requirement attracts close to, indications have emerged that a few of them could fail to scale by means of.
There are three reinsurance corporations within the insurance coverage sector, 29 basic insurance coverage corporations, and 14 life insurance coverage corporations in addition to 12 composite corporations.
The variety of insured folks within the nation is about 5 million. Whereas many corporates are additionally insured.
Following the signing of the Nigerian Insurance coverage Business Reform Act, 2025 (NIIRA 2025), insurance coverage corporations have 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. Basic 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 corporations 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 corporations stated 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 corporations to reveal the challenges slowing down their recapitalisation efforts and provided steerage on how they may scale by means of.
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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 yr.
In the meantime, additional Vanguard investigations point out that a number of the corporations concerned could also be compelled to drop sure enterprise traces 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 overall insurance coverage section as a part of efforts to satisfy the recapitalisation requirement.
It will likely be recalled that amongst corporations which have approached the NGX for capital elevating embody Guinea Insurance coverage searching for for N5.8 billion by means of rights subject, Linkage Assurance searching for for N16.3 billion supply, Lasaco Assurance searching for to boost N18.47 billion, SUNU Assurance for N9.34 billion, Sovereign Belief searching for N5.02 billion and Common Insurance coverage searching for to boost N15 billion.
In the meantime, Omosehin stated that at least 20 insurance coverage corporations have formally written to the Fee on their recapitalisation efforts informing the Fee that they have been prepared for verification.
He stated given this data, his workplace had assigned verifiers to look into their books and report again to his workplace inside a timeframe of three weeks.
In response to him, it goes past his energy as insurance coverage commissioner to increase the deadline as a result of it was said by the Nigeria Insurance coverage Business Recapitalisation Act, NIIRA 2025, and can’t be shifted by any authority besides with the modification of the regulation.
Business analysts say the looming deadline is more likely to set off a wave of mergers and acquisitions, as weaker corporations search lifelines from stronger gamers reasonably than face outright exit. They famous that whereas consolidation may strengthen the sector’s capital base, it might additionally cut back competitors within the quick time period. Nevertheless, they argued {that a} extra sturdy and better-capitalised trade would in the end improve public confidence and enhance the capability of insurers to underwrite large-ticket dangers.
Market operators additionally expressed concern over the sluggish tempo of capital elevating, citing harsh macroeconomic circumstances, excessive rates of interest and investor apathy as main constraints.
In response to them, many insurance coverage corporations are struggling to draw contemporary fairness because of low returns traditionally related to the sector. This, they stated, has made rights points and public provides much less interesting, forcing some corporations to discover various funding choices, together with personal placements and strategic partnerships.
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