Insurance recapitalisation closes solvency gaps, deepens market stability (Page 142)

By Taiye Olayemi

The insurance industry is addressing long-standing solvency and capacity gaps through phased recapitalisation, a reform designed to strengthen underwriting capacity, restore public confidence and support broader economic growth.

Operators say the Nigerian Insurance Industry Reform Act (NIIRA) 2025 provides a gradual transition that enables insurers to build capital sustainably, improve governance, enhance risk absorption and better protect policyholders.

NIIRA 2025, enacted to support Nigeria’s ambition of building a one-trillion dollar economy, seeks to reposition the insurance sector for resilience, competitiveness and increased contribution to national development.

Under the Act, minimum capital requirements have been raised to N15 billion for non-life insurers, N10 billion for life insurers, N25 billion for composite insurers and N35 billion for reinsurance companies, with full compliance required by July 30, 2026.

Recent disclosures by operators indicate that insurers are adopting structured and market-sensitive strategies, rather than rushed capital raising, to meet the new thresholds.

Linkage Assurance Plc is among operators taking concrete steps, announcing plans to raise up to N16 billion to strengthen its balance sheet and support future growth, subject to regulatory approvals.

Similarly, Sovereign Trust Insurance Plc secured board approval to raise an initial N5 billion through a rights issue as part of a broader recapitalisation programme, reflecting an industry-wide commitment to meeting the NIIRA 2025 requirements.

In a filing with the Nigerian Exchange Ltd., Linkage Assurance disclosed that its board had been authorised to raise the funds through private placement, rights issue, public offer or a combination of these options, subject to regulatory approvals.

The company said the exercise would involve an increase in its authorised share capital, with newly issued shares carrying equal rights with existing ordinary shares, alongside amendments to its Memorandum and Articles of Association in line with the Companies and Allied Matters Act (CAMA) 2020.

Sovereign Trust Insurance disclosed that shareholder approval already exists to raise up to N20 billion, providing flexibility for subsequent funding rounds to strengthen liquidity, expand underwriting capacity and support long-term growth.

Regency Alliance Insurance Plc has also announced plans to raise N15 billion through a combination of rights issue and private placement, following resolutions adopted at its 31st Annual General Meeting.

Chairman of the company, Mr Clem Baiye, said the board approved the dual funding approach to enable compliance with the new minimum capital requirement of N15 billion introduced by NIIRA 2025.

SUNU Assurances Nigeria Plc has equally aligned with the reform agenda, securing shareholder approval to raise N9 billion to close its capital gap.

Chairman of SUNU Assurances, Mr Kyari Abba Bukar, said as of September 2025, the company required N9 billion to fully meet the revised minimum capital requirement.

He said the board had been authorised to explore approved funding options, including rights issues, public offers, private placements and strategic investor participation, while also addressing free-float requirements on the Nigerian Exchange.

Veritas Kapital Assurance has obtained shareholders’ consent to raise about N15 billion through a private placement, following approval at its 48th Annual General Meeting in Abuja.

Lasaco Assurance Plc has also received shareholders’ approval to raise N25 billion through a combination of private placement and rights issue.

Chairman of Lasaco Assurance, Chief Mrs Maria Olateju Phillips, described the approval as a significant step toward meeting regulatory expectations and reinforcing the company’s market position.

She said the initiative underscored the company’s responsibility to safeguard shareholders’ investments and pursue sustainable growth, adding that improved performance over time would further strengthen investor confidence.

Guinea Insurance has earlier announced plans to convene an Extraordinary General Meeting to seek shareholders’ approval to raise up to N15 billion in additional capital.

Industry analysts say these developments suggest that insurers are responding positively to the reform framework through phased and realistic recapitalisation strategies that balance regulatory compliance with prevailing market conditions.

The National Insurance Commission (NAICOM) has also expressed satisfaction with the progress recorded so far.

Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Olusegun Omosehin, told the News Agency of Nigeria (NAN) that operators had demonstrated strong commitment toward complying with the recapitalisation provisions of NIIRA 2025.

“One of the major objectives of NIIRA 2025 is to create bigger and better-capitalised institutions that can stand the test of time,” Omosehin said.

“A deadline has been set for companies to recapitalise, and we are confident that most of them are well prepared to meet this requirement.

“We have received recapitalisation plans from many institutions, and we are quite impressed with the responses.

“In addition, there is growing interest from foreign investors eager to invest in the Nigerian insurance sector, indicating a stronger and more sustainable future for the industry,” he added.

Also speaking with NAN, National President of the Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, commended the industry’s progress in the ongoing recapitalisation exercise.

Okezie urged NAICOM to consider flexibility in timelines to allow all viable operators adequate opportunity to meet the capital thresholds, while calling for government support to further strengthen the sector.

“I believe the recapitalisation exercise will be continuous, but with what has been achieved so far, this is a good way to go.

“Insurance companies only need minimal capital to comply with NIIRA 2025; they do not need to compete with banks,” he said.

Edited by Olawunmi Ashafa

Insurance recapitalisation closes solvency gaps, deepens market stability

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On: January 5, 2026

In: General News

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Insurance recapitalisation closes solvency gaps, deepens market stability (Page 142)