Joy Agwunobi
Nigeria’s insurance sector is entering one of its most consequential reform phases in decades as operators race against time to meet tougher capital requirements introduced under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
With the National Insurance Commission (NAICOM) firmly ruling out any extension to the July 30, 2026 compliance deadline, insurers and reinsurers that fail to strengthen their balance sheets now face the real risk of losing their operating licences.
The recapitalisation exercise gained renewed urgency following NAICOM’s confirmation that the deadline, as stipulated by law, is fixed and non-negotiable. The regulator’s stance has intensified pressure on insurance operators that are yet to fully comply, while sharpening the divide between early movers and laggards in the market.
As the deadline draws closer, industry data suggest that only a fraction of Nigeria’s more than 50 licensed insurance operators, spanning life, non-life, composite insurers and reinsurers, have so far met the revised capital thresholds.The situation has exposed deep capital disparities across the industry and is setting the stage for an unprecedented wave of consolidation, strategic capital raising, and heightened regulatory enforcement.
Under NIIRA 2025, insurers are required to meet significantly higher minimum capital levels: ₦10 billion for life insurers, ₦15 billion for non-life insurers, ₦25 billion for composite operators, and ₦35 billion for reinsurers. The new benchmarks represent a major shift from the industry’s previous capital regime and are designed to strengthen solvency, improve underwriting capacity and restore public confidence in the sector.
Public disclosures from the Nigerian Exchange (NGX) and companies’ 2025 financial statements show that several insurers have begun aggressive capital-raising efforts to meet the new requirements. International Energy Insurance Plc, for instance, has secured shareholder approval at an Extraordinary General Meeting to raise ₦17.5 billion through a combination of private placement, rights issue and public offer. The company also approved an increase in its authorised share capital and amendments to its memorandum and articles of association to support the fundraising drive.
Lasaco Assurance Plc has similarly announced that its shareholders have overwhelmingly approved plans to raise the company’s minimum share capital from about ₦11.08 billion to ₦36.08 billion. The capital increase, to be executed through a mix of rights issue and private placement, is strategically aimed at exceeding the ₦25 billion statutory minimum for composite insurers. The move is expected to enhance Lasaco’s underwriting capacity, improve solvency margins and strengthen its competitive position in an increasingly tight market.
Beyond Lasaco and International Energy Insurance, at least seven other insurers, including Sunu Assurances, Sovereign Trust Insurance, Linkage Assurance, Guinea Insurance and Veritas Kapital Insurance, have disclosed board-approved plans to raise a combined ₦118.6 billion. These funds are expected to be sourced through rights issues, private placements or public offers, subject to shareholder approvals.
While capital raising gathers momentum among some operators, regulatory data point to a widening compliance gap across the industry. NAICOM disclosed that only 18 insurance companies have so far indicated readiness for capital verification under the ongoing recapitalisation programme. The disclosure was made in a lead paper delivered at the EY Insurance Summit in Lagos in November 2025.
Speaking at the event,Olusegun Ayo Omosehin, NAICOM’s commissioner for insurance, represented by Usman Jankara, the deputy commissioner (technical), said capital verification remains a central pillar of the reform agenda. According to him, the limited number of firms ready for verification underscores the growing divide between early movers and operators that are yet to firm up recapitalisation strategies.
Omosehin stressed that the capital verification process is not a routine regulatory exercise but a rigorous test of financial integrity. He explained that NAICOM has developed a robust verification framework and enlisted the services of the Big Four audit firms, including EY, to independently validate insurers’ capital positions.
Drawing an analogy with aviation security, Omosehin said every insurer must pass through a “scanner” designed to test the quality, source and sustainability of its capital base. The involvement of global audit firms, he noted, is intended to enhance transparency, reinforce credibility and boost investor confidence at a time when the industry is seeking fresh funding and broader market acceptance.
“This collaboration with the Big Four is not cosmetic. It is a cornerstone of our effort to ensure that the recapitalisation exercise is trusted, verifiable and aligned with international regulatory expectations,” Omosehin said.
Beyond capital adequacy, NAICOM has also outlined broader performance and compliance expectations for operators and other market participants. Insurers and reinsurers are expected to adhere strictly to regulatory timelines, adopt transparent reporting standards, invest meaningfully in technology and, critically, improve claims settlement practices, an area that continues to shape public perception of the industry.
The regulator also assigned clear roles to other stakeholders within the insurance ecosystem. Actuaries are expected to guide firms through IFRS 17 implementation and liability valuation adjustments, while audit firms must safeguard the independence and credibility of the verification process. Technology partners, brokers and investors are expected to strengthen distribution channels, enhance customer engagement and accelerate insurtech adoption to drive inclusion and market penetration.
Industry analysts say the passage of NIIRA 2025 has fundamentally altered the operating landscape for Nigeria’s insurance sector. For years, operators blamed weak legislation and inadequate capital for the industry’s limited contribution to economic growth. With the new law and the risk-based capital initiative now in place, analysts argue that those constraints have largely been removed.
According to experts, the success of the reform will now depend largely on how operators leverage the new framework to deepen penetration, improve product innovation and contribute more meaningfully to Nigeria’s gross domestic product.
Industry leaders have also thrown their weight behind the recapitalisation drive. Kunle Ahmed, chairman of the Nigerian Insurers Association (NIA), described the signing of NIIRA 2025 into law as a landmark achievement and expressed strong support for its implementation.
In his New Year message to industry stakeholders, Ahmed said 2026 would mark a shift from legislative milestones to execution. “Our priority is the effective implementation of the Act through close collaboration among insurance companies, regulators and key stakeholders,” he said.
He assured members that the Association would continue to provide advocacy, guidance and capacity-building support during the transition period. According to him, plans are also underway to establish a recapitalisation help desk to support insurers as they navigate the complex capital-raising and compliance process.
Ahmed expressed optimism that sustained cooperation, transparency and shared responsibility across the industry would help consolidate the gains recorded in 2025, strengthen public trust and position Nigeria’s insurance sector for more resilient and inclusive growth in the years ahead.
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