NAICOM building
By David Akinmola
For millions of Nigerians who rely on insurance to protect their homes, businesses, and livelihoods, the recapitalisation of the industry is no longer an abstract regulatory exercise.
It is fast becoming a question of which insurers will still be strong enough to pay claims when it matters most. That concern deepened as the National Insurance Commission (NAICOM) disclosed in a lead paper delivered at the EY Insurance summit in Lagos, 2025, that only 18 insurance companies have so far indicated readiness for capital verification under the ongoing recapitalisation programme.
The Commissioner for Insurance, Olusegun Omosehin, who was represented by the Deputy Commissioner for Insurance (Finance and Administration), Usman Jankara, said the response from the industry had been encouraging.
According to him, capital verification remains a critical pillar of the ongoing recapitalization exercise aimed at strengthening the sector.
However, industry data suggest that Nigeria currently has over 50 licensed insurance operators, comprising more than 30 non-life insurers, about 15 life insurers, and five reinsurers. Against this backdrop, the readiness of just 18 firms underscores the widening gap between early movers and laggards as the July 30, 2026, compliance deadline draws closer.
Capital verification, NAICOM officials insist, is not a routine regulatory exercise. Jankara said the commission had put in place a robust verification framework to ensure transparency and credibility. As part of this process, NAICOM is partnering with global audit firms, including EY and other members of the Big Four, to independently confirm compliance with the new minimum capital thresholds.
Under the revised framework introduced in August last year, non-life insurers range from N2 billion to N10 billion, and reinsurers from N10 billion to N35 billion.
An insurance sector analyst said the readiness of the 18 firms sends a strong signal to the market. “Capital verification is effectively separating well-capitalised operators from those that have relied on thin buffers. Investors will naturally gravitate towards companies that complete the process early because it reduces balance-sheet risk and improves long-term earning visibility,” he said.
Industry operators also see the development as the beginning of an inevitable consolidation wave. A senior executive at a leading underwriting firm noted that recapitalization had moved from theory to execution. “This is no longer about intentions or plans. Verification means the money is there. Firms that cannot meet the threshold will have to merge, be acquired, or exit the market,” he said.
Insurance brokers, who sit between insurers and policyholders, say stronger capital could help restore confidence in the industry, particularly around claims settlement.
Speaking to The Guardian at the weekend on the development, the Executive Secretary/Chief Executive Officer of the Nigerian Council of Registered Insurance Brokers (NCRIB), Tope Daramola, said persistent delays in claims payments had hurt public perception of insurance for years.
”If recapitalization is done properly, policyholders will feel the impact. Better capital means better ability to pay claims, and that is what ultimately grows the market,” he said.
NAICOM has already outlined a clear timetable for compliance. Insurers are required to submit their recapitalization plans by September 30, 2025. Capital verification exercises will run from November 2025 to June 2026, while only firms that meet the minimum capital requirements by July 30, 2026, will retain their operating licences.
Beyond compliance, investors are increasingly focused on what a leaner, stronger insurance sector could mean for Nigeria’s economy. Insurance penetration remains low relative to GDP, limiting the industry’s contribution to economic stability and long-term capital formation. Well-capitalised insurers are better positioned to underwrite large and complex risks in sectors such as infrastructure, energy, and aviation and agriculture areas, central to Nigeria’s growth agenda.
At the summit, EY’s Partner and Consulting Leader for West Africa, Ben Afudego, said collaboration among regulators, operators, and advisers would be critical to unlocking the sector’s potential.
He described the recapitalization programme as an opportunity to reposition insurance as a catalyst for national development rather than a peripheral financial service.
Some industry observers caution that short-term disruptions are inevitable. Smaller or weaker firms may struggle to meet the new thresholds, raising concerns about job losses and market dislocation.
However, an investment banker familiar with financial services transactions said the shakeout could ultimately strengthen the sector. “From an investor perspective, fewer but stronger players improve pricing discipline and profitability. That is what attracts long-term capital,” he said.
As the recapitalization clock continues to tick, the emergence of 18 verification-ready insurers highlights both progress and pressure within the industry. For investors, the message is increasingly clear: Nigeria’s insurance landscape is on the brink of significant transformation, and early identification of resilient, well-capitalised players could define returns in the years ahead.
