The National Insurance Commission (NAICOM) has announced that over 70% of insurance companies in Nigeria have successfully completed the verification process for the ongoing recapitalisation exercise, ahead of the July 31 deadline. This milestone marks a significant step in strengthening the financial base of the industry.
Details of the Recapitalisation Exercise
The recapitalisation directive, issued by NAICOM in early 2025, required all insurers to increase their minimum paid-up capital to specified levels based on their operational class. For life insurance firms, the new minimum is N8 billion; for general insurance, N10 billion; composite insurance, N18 billion; and reinsurance, N20 billion. The verification process ensures that companies have met these requirements through either fresh capital injection, mergers, or acquisitions.
According to NAICOM's spokesperson, Mr. Tunde Olasupo, "As of July 26, 2026, 72% of operators have completed the verification exercise, demonstrating strong compliance. The remaining companies are at various stages of the process, and we expect full compliance by the deadline."
Impact on the Insurance Sector
The recapitalisation is aimed at enhancing insurers' capacity to underwrite large risks, improve solvency, and boost consumer confidence. Industry analysts project that the exercise will lead to a consolidation of the market, with stronger players emerging from the process. The Nigerian insurance sector has long faced criticism for low penetration and capital inadequacy, and this move is expected to address those issues.
NAICOM has warned that any insurer failing to meet the deadline will face sanctions, including suspension of operations or revocation of licenses. However, the commission has also noted that it is working with companies to resolve outstanding issues.
Challenges and Next Steps
Despite the high compliance rate, some insurers have cited difficulties in raising capital due to the current economic environment. The Nigerian economy has been grappling with inflation and foreign exchange volatility, which have impacted investment inflows. Nevertheless, NAICOM has maintained that the deadline is non-negotiable.
Going forward, the commission plans to intensify its market surveillance to ensure that only capitalized and efficient operators remain in the industry. This is part of a broader reform to align Nigerian insurance standards with international practices.
