…NIA, stronger capital must translate into better service, capacity
By David Akinmola
Nigeria’s insurance industry has emerged from its 12-month recapitalization exercise with N1.079 trillion in fresh capital, a development the National Insurance Commission (NAICOM) aid could significantly expand the sector’s capacity to insure major infrastructure, energy and other strategic economic projects as the Federal Government pushes its $1 trillion economy ambition.
The Commissioner for Insurance, Olusegun Omosehin, at the weekend revealed in Lagos at a media interactive session on developments in the insurance sector, saying the outcome represented a major increase in the financial strength available to underwriters and reinsurers.
Omosehin said the exercise had produced “a total capital of N1.079 trillion,”challenging stakeholders to recognize the progress recorded through the reform.
The capital raised by operators is currently domiciled in escrow accounts with the Central Bank of Nigeria (CBN), with the commissioner assuring that the funds would be released to the respective companies on or before September 30,2026.
The development effectively shifts the industry’s challenge from raising capital to deploying it productively, particularly in an economy where huge infrastructure, energy, aviation, marine and industrial projects require stronger domestic risk-taking capacity.
For NAICOM, the objective of the recapitalization goes beyond stronger balance sheets. The commission expects the additional capital to enable insurers to retain a greater proportion of risks locally, reduce dependence on offshore reinsurance and increase the industry’s contribution to economic development.
The exercise was triggered by the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which was signed into law by President Bola Ahmed Tinubu on July 31, 2025.
Under the new framework, insurers and reinsurers were required to meet substantially higher minimum capital thresholds within 12 months, with the transition period ending on July 31, 2026.
Operators responded through a combination of rights issues, private placements, public offerings, mergers, acquisitions and strategic investment to meet the new requirements.
NAICOM subjected the funds raised to a verification process, scrutinizing admissible capital instructments, eligible assets and reporting requirements to ensure that only qualifying capital was recognized.
At the end of the exercise, 50 underwriters and reinsurance companies were confirmed to have met the statutory minimum capital requirements.
The commission had initially announced 43 compliant companies on August 2, 2026. Following further review and the processing of late submissions, seven additional operators five non-life and two life companies were confirmed compliant, bringing the final tally to 48 insurance companies and two reinsurance companies.
The Nigerian Insurers Association (NIA) said the successful completion of the exercise had created a stronger foundation for the industry’s next phase of growth, while stressing that the additional capital must ultimately translate into stronger institutions and better value for policyholders.
NIA Chairman, Ebelechukwu Nwachukwu, has described the recapitalization as a defining moment for the industry, nothing that stronger capitalization should result in improved service delivery and greater capacity to compete in the Nigerian and African markets.
Nwachukwu also commended NAICOM’s structured approach to the exercise, particularly the clarity of its regulatory guidelines, verification process and defined timelines, saying these provided operators with a credible framework within which to raise and validate the required capital.
The NIA’s position reinforces the expectation that the exercise should produce more than larger balance sheets, with insurers now under pressure to demonstrate that the capital mobolised can improve underwriting capacity, claims-paying ability, customer service and the industry’s overall contribution to the economy.
The capital position gives the industry greater financial capacity to participate in risks that previously exceeded the balance sheets of individual Nigerian insurers.
The commissioner said NAICOM’s regulatory attention would now shift towards risk-based supervision, market conduct, corporate governance and prompt settlement of genuine claims, signalling a new phase in the reform programme.
The post-recapitalisation environment, he said, would also require insurers to demonstrate greater participation in the insurance of national assets, infrastructure and energy projects.
The emphasis on local risk retention could have wider implications for Nigeria’s balance of payments and financial markets, as a stronger domestic insurance industry could reduce the volume of premiums and risks transferred to foreign reinsurers.
Industry stakeholders have long identified limited domestic capacity as one of the constraints preventing Nigerian insurers from retaining a larger share of high-value risks, particularly in the oil and gas, aviation and infrastructure sectors.
The stronger capital base could therefore provide the industry with an opportunity to increase its share of these businesses while retaining more insurance premiums within the Nigerian economy.
However, NAICOM made clear that recapitalisation would not be treated as a licence for operators to pursue aggressive expansion without adequate risk management.
