The federal government has urged insurance and reinsurance firms to prepare for periodic increases in their capital requirements, even as the sector races to meet the new minimum capital thresholds set under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The ongoing recapitalisation exercise—expected to conclude by July 31, 2026—marks the most ambitious overhaul of the industry in decades. But according to Minister of State for Finance, Dr. Doris Uzoka-Anite, the reforms are only the beginning.
Speaking at an industry forum, she said the sector must continually strengthen its capital base if it hopes to underwrite high-value risks in aviation, oil and gas, cross-border operations, and even insure local banks whose capitalisation now exceeds N200 billion.
A Stronger Insurance Sector as Cornerstone of Economic Reforms
Uzoka-Anite noted that Nigeria’s broader fiscal, monetary, and structural reforms require an insurance sector capable of boosting investor confidence, supporting production, and providing long-term financial stability.
“For years, lack of public trust and weak investor confidence have undermined the insurance industry,” she said. “NIIRA 2025 is designed to correct that and rebuild credibility.”
She pledged the Finance Ministry’s continued support for NAICOM’s drive to improve prompt claims settlement, market conduct supervision, compulsory insurance enforcement, and consumer data protection.
“These measures are not punitive but corrective—meant to protect both the industry and its consumers,” she added.
Lessons From the Banking Sector
Drawing parallels with the banking industry, the minister reminded industry leaders that Nigerian banks have undergone multiple recapitalisation rounds since 2004—resulting in one of sub-Saharan Africa’s strongest financial systems.
“This is the same vision we have for the insurance sector,” she said. “Globally, the insurance industry is often stronger than the banking sector, but in Nigeria the reverse is the case. That must change.”
She criticised decades-long delays in reforming the sector, stressing that stronger regulation must be matched with stronger governance from operators themselves.
“There will be multiple amendments to NIIRA and multiple recapitalisations until we achieve the industry we want,” she declared. “NIIRA 2025 is not just a law; it is a national mission to rebuild trust and redefine the role of insurance in our economy.”
Industry Regulators, Experts Back Reforms
Commissioner for Insurance, Mr. Olusegun Omosehin, reaffirmed NAICOM’s commitment to building a strong, solvent, and competitive insurance industry capable of meeting obligations to policyholders.
“The recapitalisation mandated by NIIRA 2025 is aimed at strengthening financial soundness and stability,” he said. “Rebuilding trust is non-negotiable.”
Supporting the minister’s position, Dr. Biodun Adedipe, founder of B. Adedipe Associates, said the 400 percent increase in capital requirements may seem steep but should be reviewed systematically at least every five years to ensure long-term resilience.
Under NIIRA 2025, new minimum capital requirements have increased dramatically:
- Life insurers: N10 billion (from N2 billion)
- Non-life insurers: N15 billion (from N3 billion)
- Reinsurance companies: N35 billion (from N5 billion)
The reforms, the federal government insists, will determine not just the industry’s competitiveness but its contribution to economic growth, job creation, and social protection.
