By David Akinmola
Insurance practitioners across the country have renewed calls on the Federal Government to grant temporary tax reliefs to underwriting firms as the industry commences implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which imposes significantly higher capital requirements.
The new law mandates a minimum capital of N10 billion for life insurers, N15 billion for non-life companies, N25 billion for composite firms, and N35 billion for reinsurers. While operators largely agree that the reform is necessary to strengthen the industry, many warn that the transition may overwhelm firms without targeted government intervention.
Chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said insurers require financial breathing room to meet the capital thresholds.
“The NIIRA 2025 entails recapitalisation. Government needs to support these companies by granting them tax exemptions for a while. Once they stabilise, they can resume tax payments. Without this, implementation will be difficult,” he said.
According to him, Nigeria’s tax reform efforts have historically been insensitive to industry-specific realities, and future policies must be designed to support the growth of insurance, which continues to struggle with low penetration and slow premium growth.
Founder of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, echoed the call, warning that economic pressures such as inflation, high interest rates and weak consumer purchasing power could limit insurers’ ability to raise fresh capital.“This reform is long overdue, but it comes at a time when companies are struggling. Tax reliefs are necessary if insurers are to recapitalise effectively. Without support, some firms may not survive,” he said.
He also urged the National Insurance Commission (NAICOM) to ensure transparent and corruption-free enforcement, stressing that weak supervision could derail the objectives of the reform.
Industry practitioners speaking at recent sector engagements have also backed the call for fiscal support.
Managing Director of TrustLink Insurance Brokers, Mrs. Abiola Olawale, said many firms may struggle to meet NIIRA’s capital requirements if full tax obligations are maintained during the transition.
“The recapitalisation burden is heavy, and operators cannot carry it along with rising tax costs. Tax waivers will allow companies redirect funds into capital building and technology upgrades,” she noted during a recent Lagos insurance forum.
Also, Chief Executive of Prime Reinsurance Ltd, Clinton Ogbonna, warned that the industry risks losing smaller players if government fails to intervene.
“Reinsurers face the highest capital threshold under NIIRA. Without tax reliefs, some companies may be forced into mergers they are unprepared for, or exit the market entirely. Government support is essential at this stage,” he said at another industry gathering.
Stakeholders further urged the government to deepen patronage of local insurers, noting that the continued outsourcing of major insurance contracts to foreign entities undermines the domestic market.
They also appealed for civil and professional enforcement of compulsory insurance provisions under the new Act, emphasising that coercive methods would erode public trust at a time the sector is seeking to expand its customer base.
Nwosu added that government must demonstrate leadership by adopting comprehensive insurance for public assets rather than limiting coverage to basic third-party policies.
This recapitalisation effort follows similar attempts in 2005 and 2019, both stalled by litigations and industry pushback. Nigeria’s insurance sector remains one of the least capitalised and least penetrated in Africa despite being the continent’s largest economy—a gap practitioners say NIIRA 2025 can close, but only with robust government support.
