By LOVETH AZODO, Lagos
About 20 insurance companies are set to undergo capital verification as the industry moves closer to the July 31 recapitalisation deadline, with the National Insurance Commission (NAICOM) also signalling readiness to facilitate mergers for operators that may struggle to meet the new financial thresholds.
The Commissioner for Insurance, Olusegun Omosehin, disclosed that a number of insurers have already indicated they have met the new minimum capital requirements and are awaiting regulatory confirmation, while the Commission is prepared to support consolidation among companies unable to raise the required funds before the deadline.
Speaking at an interactive session with journalists in Lagos, Omosehin said the verification process would begin shortly, with independent auditors engaged to review the claims of the companies that have approached the regulator to confirm compliance.
He added that NAICOM is also engaging firms facing capital constraints and could help “midwife” merger arrangements to ensure that no operator loses its licence when the deadline expires.
The verification exercise will be carried out by four major accounting firms: PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte, working alongside the regulator to assess the financial positions of the insurers.
According to Omosehin, the auditors will examine several indicators of financial strength, including statutory deposits maintained with the Central Bank of Nigeria, which by regulation must amount to 10 per cent of an insurer’s minimum capital.
He stressed that the recapitalisation exercise is not being pursued merely for compliance purposes but as part of a broader effort to strengthen the financial resilience of the insurance industry. “We are not recapitalising for recapitalisation sake,” he said, explaining that the objective is to guarantee the financial soundness of the Nigerian insurance market and position operators to absorb larger risks in a more competitive environment.
The Commissioner noted that the recapitalisation requirement is one of the key provisions under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, which introduces a new minimum capital requirement alongside a risk-based capital framework.
Under the current phase, life insurance companies are expected to raise their capital base from ₦2 billion to ₦10 billion, non-life insurers from ₦3 billion to ₦15 billion, while reinsurers must increase theirs from ₦10 billion to ₦35 billion.
Beyond capital reforms, Omosehin revealed that three key industry work groups established under NIIRA focusing on corporate governance, digitalisation and financial inclusion have already commenced work as part of broader reforms aimed at strengthening the sector.
He added that the industry is gradually improving market discipline, particularly in the area of claims settlement, which he described as encouraging.
According to him, the insurance market was significantly tested in the previous year amid economic pressures, with some predicting that operators would struggle to cope.
However, he said the industry remained resilient despite those challenges. “Last year the market was tested. Many expected the industry to crumble, but the operators stood firm,” he said, adding that the sector’s ability to weather the pressure has helped rebuild confidence in the Nigerian insurance market.
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