Recapitalisation: Expect A Serial Review Going Forward, FG Tells Insurers, Reinsurance Companies

LAGOS – As insurance and reinsurance companies are jostling to meet the new minimum capital prescription as provided in the Nigerian Insurance Industry Reform Act (NIIRA) 2025, the federal government has told them to also prepare their minds towards a review of the capital base in no time.

This comes even as the ongoing exercise scheduled to end by 31st July 2026 is yet to be concluded. According to Dr. Doris Uzoka-Anite, the Minister of State for Finance of the Federal Ministry of Finance, for insurance to be able to pick high ticket businesses in sectors such as aviation, oil and gas and do international business across borders and even to insure local banks with over N200billion capital base, the underwriters have to beef up their capital threshold going forward.

“The ongoing implementation of NIIRA 2025 is a landmark initiative that aligns the insurance sector with the Federal Government’s broader economic transformation strategy.

It is more than a regulatory framework; it represents a fundamental shift towards building institutions that are robust, ethical, innovative, and responsive to the evolving needs of Nigerians.

Across fiscal, monetary, and structural policy fronts, reforms are being implemented to rebuild confidence, attract investment, and stimulate production.

As these reforms unfold, one thing becomes clear — no sustainable economic transformation can be achieved without a strong, credible, and innovative insurance sector.

For Nigeria, the ongoing transformation presents both a challenge and an opportunity. It challenges us to adapt — to embrace digital solutions, enhance regulation, and strengthen consumer confidence.

But, it also offers a powerful opportunity: to leapfrog outdated models and build a 21st-century insurance industry from the ground up.

Before now, when you talk about insurance, everybody would say, those insurance people, they’ve come again, I beg, I’m not doing any insurance, they don’t pay.

I’m sure you’ve heard about that. That lack of public trust, lack of investor confidence, has largely led to the underperformance of the insurance industry. And I’m glad that the NIIRA 2025 has been set out to correct that, and to reposition public trust. It’s very important.

And for us at the Ministry of Finance will continue to support NAICOM’s intensified efforts on prompt claims settlement, market conduct supervision, data protection, and enforcement of compulsory insurance policies.

These actions are not punitive rather, they are corrective and supportive, designed to protect both the consumer and the industry.

Let me just, at this point, just mention something. In case, you know, I’m talking to the owners of the insurance industry, the directors. You are the ones that champion and determine what your institutions do. I just want us to draw from the experience that we have from the banking industry. Since 2004, the banking industry has gone through multiple recapitalization exercises.

And today, we have the strongest banking industry or banking sector in the whole of sub-Saharan Africa. And this is the same vision we have for the insurance sector.

We believe that direct capitalisation strengthens your ability to take greater risks, strengthens your risk management frameworks, your operations, and of course, engender that trust that we need to make insurance an industry that can compete effectively with any banking sector in the world.

Actually, in the rest of the world, especially in the Western world, the insurance industry is bigger than the banking sector.

But, you find that skewed here in Nigeria where the banking sector is stronger than the insurance industry. And I can understand why. If for 22 years you’ve been trying to pass an act, a law, then something is wrong.

So, it’s either the regulator was not strong, or the directors were not forceful enough about change, about instituting and demanding a stronger insurance industry. So, despite the facts, or in as much as NAICOM is pushing to strengthen the industry, you also must collectively champion a stronger insurance industry because it is your own capital at risk.

And to protect that capital at risk, or your capital, is why we are trying to strengthen NIIRA. This won’t be the first one. I’m sure there’ll be multiple amendments to the NIIRA Act to continue to strengthen it.

And this won’t be the first capitalization. I’m sure there’ll be multiple recapitalizations until we get to where we’re going. And it is our collective responsibility. The NIIRA 2025 is not just an act, like I said, it is a reform framework and a national mission, a mission to rebuild trust, restore relevance, and redefine the place of insurance in our economy and in our daily lives.” Said Dr Uzoka-Anite.

She noted that the success of NIIRA 2025 will be measured by the lives protected, impact on the economy, the jobs secured, and the futures restored emphasing the need for collective partnership, collaboration, patience, and courage.

Mr Olusegun Omosehin, the Commissioner for Insurance at the National Insurance Commission (NAICOM) reiterated the Commission’s commitment to building an insurance industry with strength, financial soundness, stability and competiveness capable of meeting obligations and expectations of the policyholders.

“The Commission has embarked on a recapitalisation exercise for all insurance and Reinsurance companies, as mandated by NIIRA 2025. This exercise is aimed at strengthening the financial soundness, stability, and competitiveness of the insurance sector in Nigeria.” he said.

Omosehin, emphasised that rebuilding trust and confidence under NIIRA 2025 is sacrosanct as the bedrock of the industry, stressing that without it, sustainable growth and success are unattainable.

Correlating the honourable minister’s position, Dr Biodun Adedipe, Founder/Chief Consultant of B Associates Limited noted that though the current increase in capital base is high at 400percent, there’s need for a systematic review in at least, every five years.

NIIRA 2025 has stipulated in the ongoing recapitalization a minimum capital requirement (MCR) of N10billion from N2billion, N15billion from 3billion and N35billion from N5billion for life insurers, non-life insurance companies and reinsurance firms respectively, representing about 400percent increase.