Recapitalisation: 12 insurance firms in tight corner

•Regulator insists on the deadline  

•Some insurers consider scaling down

By Rosemary Iwunze

As the July 31 deadline given to insurance companies to meet the recapitalisation requirement draws near, indications have emerged that some of them may fail to scale through.

There are three reinsurance companies in the insurance sector, 29 general insurance companies, and 14 life insurance companies as well as 12 composite companies.

The number of insured people in the country is about five million. While many corporates are also insured.

Following the signing of the Nigerian Insurance Industry Reform Act, 2025 (NIIRA 2025),   insurance firms were mandated to shore up their operating capital. 

Life   insurance firms are mandated to shore up their operating capital from N2 billion to N10 billion. General insurance firms are to raise theirs from N3 billion to N15 billion. Reinsurance firms are to shore up their capital from N10 billion to N35 billion.

Investigations by Vanguard also revealed that some companies are considering jettisoning either their life insurance or general insurance business segments in a bid to fit into a lower capital threshold.

This came as the National Insurance Commission, NAICOM, last week, held a strategic meeting with about 12 insurance companies said to be largely motionless in the ongoing recapitalisation drive.

Vanguard learnt that at the meeting, NAICOM reiterated that the July 31, 2026 deadline would not be extended.

Speaking during the meeting, the Commissioner for Insurance, Mr. Segun Omosehin, directed the affected companies to disclose the challenges slowing down their recapitalisation efforts and offered guidance on how they could scale through.

Omosehin also charged the firms to intensify their momentum, warning that any company that fails to comply risks deregistration by August this year.

Meanwhile, further Vanguard investigations indicate that some of the companies involved may be forced to drop certain business lines to survive.

In one instance, a company that attended the strategic meeting following NAICOM’s warning has reportedly resolved to shut down its life insurance arm and focus solely on the general insurance segment as part of efforts to meet the recapitalisation requirement.

It will be recalled that among companies that have approached the NGX for capital raising include Guinea Insurance seeking for N5.8 billion through rights issue, Linkage Assurance seeking for N16.3 billion offer, Lasaco Assurance seeking to raise N18.47 billion, SUNU Assurance for N9.34 billion, Sovereign Trust seeking N5.02 billion and Universal Insurance seeking to raise N15 billion.

Meanwhile, Omosehin said that no less than 20 insurance firms have officially written to the Commission on their recapitalisation efforts informing the Commission that they were ready for verification.

He said given this information, his office had assigned verifiers to look into their books and report back to his office within a timeframe of three weeks.

According to him, it goes beyond his power as insurance commissioner to extend the deadline because it was stated by the Nigeria Insurance Industry Recapitalisation Act, NIIRA 2025, and cannot be shifted by any authority except with the amendment of the law.

Industry analysts say the looming deadline is likely to trigger a wave of mergers and acquisitions, as weaker firms seek lifelines from stronger players rather than face outright exit. They noted that while consolidation could strengthen the sector’s capital base, it may also reduce competition in the short term. However, they argued that a more robust and better-capitalised industry would ultimately enhance public confidence and improve the capacity of insurers to underwrite large-ticket risks.

Market operators also expressed concern over the slow pace of capital raising, citing harsh macroeconomic conditions, high interest rates and investor apathy as major constraints.

According to them, many insurance firms are struggling to attract fresh equity due to low returns historically associated with the sector. This, they said, has made rights issues and public offers less appealing, forcing some companies to explore alternative funding options, including private placements and strategic partnerships.

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