July Deadline Looms: 12 Insurers Risk Deregistration as Recapitalisation Pressure Mounts

Tension is rising in Nigeria’s insurance industry as about 12 companies face the risk of missing the July 31, 2026 recapitalisation deadline set by regulators.

The sector includes three reinsurance firms, 29 general insurance companies, 14 life insurers, and 12 composite operators, with an estimated five million Nigerians covered, in addition to corporate policyholders.

Under the Nigerian Insurance Industry Reform Act, 2025 (NIIRA 2025), firms are required to boost their capital significantly. Life insurance firms must increase their capital base from N2 billion to N10 billion, general insurers from N3 billion to N15 billion, and reinsurance companies from N10 billion to N35 billion.

Sources indicate that some operators are considering scaling down operations by dropping either life or general insurance businesses to meet lower capital requirements.

The National Insurance Commission (NAICOM) recently held a strategic session with the affected firms, warning that the recapitalisation deadline remains fixed.

At the meeting, Commissioner for Insurance Segun Omosehin asked companies to outline the challenges delaying their progress and encouraged them to intensify efforts. He cautioned that non-compliance could result in deregistration by August.

Investigations show that one of the firms has already opted to discontinue its life insurance segment and concentrate on general insurance as a survival strategy.

Several insurers have approached the Nigerian Exchange (NGX) to raise funds. Among them are Guinea Insurance (N5.8 billion rights issue), Linkage Assurance (N16.3 billion), Lasaco Assurance (N18.47 billion), SUNU Assurance (N9.34 billion), Sovereign Trust (N5.02 billion), and Universal Insurance (N15 billion).

According to Omosehin, over 20 companies have formally written to NAICOM, declaring readiness for verification. He said review teams have been assigned to examine their financial records within three weeks.

He emphasised that extending the deadline is beyond his authority, as it is enshrined in law and can only be altered through legislative amendment.

Industry analysts say the looming deadline may drive consolidation through mergers and acquisitions, as struggling firms seek stronger partners. While this could temporarily limit competition, they believe it will ultimately create a more stable and well-capitalised industry.

Market stakeholders, however, cite macroeconomic challenges, high interest rates, and low investor confidence as major obstacles, noting that poor historical returns have made it difficult for insurers to attract fresh investment.

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