Nigeria’s insurance sector is facing turbulent times following the release of new recapitalisation figures by the National Insurance Commission (NAICOM), which have triggered sharp reactions on the Nigerian Exchange (NGX). The figures, requiring capital thresholds ranging from ₦10 billion to ₦35 billion, reveal stark disparities in the financial strength of industry players and have sparked a wave of price corrections across insurance stocks.
According to the latest data, the sector’s total market capitalization stands at about ₦939.95 billion, spread over 8,052 transactions. However, individual stock performances tell a deeper story of investor unease. AIICO Insurance Plc slumped by 9.31%, AXA Mansard Insurance Plc fell by 4.5%, and Consolidated Hallmark Holdings Plc shed 9.86%. Coronation Insurance Plc, Cornerstone Insurance Plc, and Regency Assurance Plc also recorded near double-digit losses, underscoring widespread market sell-offs.
Not all firms buckled under the pressure. Mutual Benefits Assurance Plc posted a 10% gain, signaling strong investor confidence in its business model, while Universal Insurance Plc dominated trading volumes with 308 million shares. AIICO followed with nearly 118 million, but some firms—including African Alliance Insurance Plc and Fortis Global Insurance Plc—recorded zero activity, reflecting a divide between active and stagnant players.
NAICOM’s recapitalisation exercise is part of a broader reform push under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, signed into law by President Bola Ahmed Tinubu on July 31. The law introduces new minimum capital requirements: ₦10 billion for life insurers, ₦15 billion for non-life insurers, ₦25 billion for composite insurers, and ₦35 billion for reinsurers.
Speaking on the development, Dr. Usman J. Jankara, Deputy Commissioner (Technical) at NAICOM, explained that the exercise aligns Nigeria’s sector with global standards through a Risk-Based Capital (RBC) framework designed to improve solvency and claims-paying capacity. Insurance and reinsurance firms have until July 30, 2026, to comply, with NAICOM promising clear guidelines on capital structure, asset admissibility, and verification procedures in the coming weeks.
Only fully perfected assets will count toward meeting the new requirements, and non-compliant companies risk forced mergers, liquidation, or licence revocation. To support the process, NAICOM has committed to engaging regulators such as the SEC, CAC, and NRS to offer compliance incentives, while an in-house committee will monitor implementation.
Analysts say the reforms are a watershed moment for Nigeria’s insurance market. “This is more than just recapitalisation—it’s a test of resilience and strategy. Operators must realign quickly or risk being left behind,” one industry expert noted.
The sector now finds itself at a crossroads: companies that embrace consolidation, governance improvements, and operational efficiency may emerge stronger, while those slow to adapt could lose investor confidence and market share.
With only a year to meet the capital deadline, NAICOM’s directive has sent a clear message, Nigeria’s insurance sector must modernize, stabilize, and strengthen to play a greater role in the nation’s economic growth.
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