The total capital of Nigeria’s insurance industry has risen to ₦1.079 trillion following the recently concluded recapitalisation exercise, according to the National Insurance Commission (NAICOM).
Olusegun Omosehin, commissioner for insurance and chief executive officer of NAICOM, disclosed this on Friday during a media interactive session in Lagos, where he provided an update on the outcome of the exercise and the commission’s priorities for the sector.
Omosehin said 48 insurance companies and two reinsurance companies met the recapitalisation requirements and had been re-licensed to continue operations.
“The recapitalisation produced N1.079trn total capital. Having 50 entities cross that line, for me, I think we’ll give ourselves some kudos. It also speaks to the renewed confidence of Nigerian investors in the insurance space,” he said.
He said the exercise was not designed to eliminate operators from the market but to strengthen their financial capacity, with companies allowed to raise fresh capital, merge or enter into partnerships to meet the new requirements.
“Let me state unequivocally that the capital exercise was never intended to eliminate any operator from the market. That wasn’t the intention. We announced at the beginning that no operator will be allowed to go down,” Omosehin said.
The commissioner said NAICOM provided operators with guidelines, timelines and regulatory requirements throughout the process, adding that decisions taken by the commission were based on the law, prudential principles and the long-term interests of the insurance industry.
He said the interests of policyholders, investors and other stakeholders were also considered throughout the exercise.
Four-stage verification
Omosehin described the recapitalisation as one of the most transparent exercises undertaken by the commission, saying operators passed through four levels of assessment and verification.
The process involved self-assessment by insurance companies, a review by NAICOM, independent verification and final consideration by the commission’s governing board.
He said independent verification was carried out by major audit firms, including PricewaterhouseCoopers (PwC), KPMG, Deloitte and Ernst & Young (EY), which reviewed the capital raised by operators and conducted third-party confirmations before submitting their findings to the commission.
Operators were also required to transfer funds raised during the exercise into escrow accounts with the Central Bank of Nigeria (CBN) as part of the verification process.
Omosehin said the arrangement was intended to enable the regulator to verify the source and movement of funds and assess compliance with anti-money laundering and counter-terrorism financing requirements.
“The account will be opened in your name. Your escrow account is your account. But rather than it being with a commercial bank, it moves to the Central Bank,” he said.
He explained that the arrangement allowed NAICOM to examine both the flow and origin of funds, noting that investment notes and other documentation alone were insufficient to establish that capital had genuinely been raised.
NAICOM shifts focus to post-recapitalisation growth
With the recapitalisation exercise concluded, Omosehin said the commission would now focus on increasing insurance penetration, expanding financial inclusion and improving access to insurance products across the country.
He said digital innovation and the development of insurance technology would also remain areas of focus, noting that NAICOM had already licensed some insurtech companies and was considering additional applications.
“We continue to see prospects in this area. Hence, you are aware we’ve licensed a few insurtechs, and there are still a few in the pipeline that we will be considering,” he said.
The commission, he added, would work on expanding insurance distribution channels while maintaining its focus on prompt claims settlement.
Omosehin also identified risk-based supervision as a key priority for the post-recapitalisation period, as the regulator moves from overseeing the capital-raising exercise to monitoring the financial strength, risk profiles and conduct of insurers and reinsurers operating under the new regime.
