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By Henry Uche
Nigeria’s insurance industry is bracing for a major shake-up as about 20 underwriting firms move into a decisive phase of capital verification, an exercise that could redefine the competitive landscape and determine which operators survive the ongoing recapitalisation drive.
At the heart of the process is a rigorous review designed to validate the financial claims of insurers that have declared compliance with new minimum capital thresholds set by the National Insurance Commission. The verification aims to confirm not just the existence of funds, but their adequacy, authenticity, and alignment with regulatory standards as the July 31, 2026 deadline looms.
The exercise signals a critical turning point in the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, widely regarded as the most ambitious overhaul of the sector in decades. Industry watchers say the outcome could trigger mergers, acquisitions, and potential exits, particularly among firms struggling to meet the stringent requirements.
Although the identities of the affected insurers remain undisclosed, there are strong indications that the list may include some of the industry’s biggest players—raising the stakes for what could become a defining moment for Nigeria’s insurance market.
To ensure credibility and transparency, NAICOM has engaged four of the world’s leading audit firms—PricewaterhouseCoopers, Ernst & Young, KPMG, and Deloitte—to independently scrutinise the capital positions of the insurers. The firms are working in collaboration with the regulator and are expected to complete the first phase of the exercise within three weeks, after which another batch of companies will undergo similar checks.
Speaking at an interactive session with journalists in Lagos, the Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, underscored the importance of the verification process, particularly the role of statutory deposits held with the Central Bank of Nigeria.
“Statutory deposits is an important criteria in this exercise and any operator who didn’t meet up to this requirement will not be given regulatory nod of compliance,” he said. “By regulation, statutory deposits translate to 10 per cent of your minimum capital that must be sent to the apex bank.
“So, CBN will be working with NAICOM and the four verifying companies to know the true position of these underwriters.”
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Omosehin made it clear that there would be no extension of the recapitalisation deadline, reinforcing the regulator’s resolve to enforce compliance under the new legal framework. However, he hinted at a proactive regulatory approach to prevent widespread license losses, particularly among weaker firms.
“We will be having a meeting with those struggling to recapitalise and offer to midwife the marriage among them to ensure no license lapse at the expiration of the deadline,” he said.
He further explained that recapitalisation is a cornerstone of financial system stability, noting that the reforms are structured in phases to ensure both immediate compliance and long-term resilience.
“Recapitalisation is an aspect of guaranteeing the financial soundness of an asset. Interestingly, it happens to be one of the key provisions in the NIIRA 2025.
“NIIRA actually made provision for a new minimum capital requirement (MCR) plus risk-based capital (RBC). So, the first part of it is just the MCR. That is what we are enforcing for now, asking entities to move from N2 billion for Life to N10 billion, N3 billion for Non-Life to N15 billion, and for reinsurance to move from N10 billion to N35 billion.
“So basically, that is what we are enforcing. The second phase of it is to then look at their portfolio of risk in relation to capital they are holding, which is the risk-based capital.”
Beyond capital adequacy, NAICOM is also tightening compliance in customer identification and data integrity. The regulator has mandated all insurers to link new insurance policies to the National Identity Number (NIN) by April 30, 2026, a move aimed at strengthening Know-Your-Customer (KYC) processes and curbing fraud.
Existing policies will be allowed to run their course, but all new policies must comply with the directive. Omosehin dismissed concerns about the feasibility of the deadline, insisting that the widespread adoption of NIN across banking and telecommunications sectors makes compliance straightforward.
“This shouldn’t be a challenge. Virtually, everybody has a NIN. When you want to buy a phone line, you submit your NIN which is then linked to your SIM.
“The same thing applies when you want to open an account in the bank. And insurers now want to move in this direction for proper identification and Know-Your-Customer (KYC) requirements,” he said.
As the countdown to the recapitalisation deadline accelerates, the coming weeks are expected to be pivotal. For some insurers, the verification process could validate their readiness for a stronger, more competitive market. For others, it may mark the beginning of consolidation, or exit, from an industry undergoing one of its most consequential transformations.
