Insurance brokers have warned boards of underwriting firms against neglecting the interests of shareholders and policyholders in the ongoing recapitalisation exercise, even as a surge of foreign investors take advantage of Nigeria’s weak foreign exchange rate to acquire major stakes in local insurance companies.
With the July 2026 deadline for recapitalisation fast approaching, foreign investors are already in the country evaluating opportunities in the insurance and reinsurance segments, NATIONAL ECONOMY has learnt.
Industry sources confirmed that all 60 insurance companies and five reinsurance firms have submitted their recapitalisation plans to the National Insurance Commission (NAICOM) as at September 30, 2025. It was gathered that some of the larger firms plan to acquire smaller players where possible, while others have signalled intentions to merge or be acquired.
Before the current recapitalisation, foreign investors had already made inroads into the market including the transformation of Royal Exchange General Insurance into Rex Insurance, FBN Insurance into Sanlam Allianz Nigeria, and Law Union & Rock into Tangerine Insurance, among others.
Though several big underwriters now have capital bases above ₦100 billion, analysts say they will still need to raise additional funds to align with their exposure in high-risk sectors such as aviation, oil and gas, and maritime, as required under the Risk-Based Capital (RBC) framework. Smaller firms, meanwhile, are struggling to meet the minimum thresholds.
The recapitalisation drive, which coincides with similar exercises in the banking and pension sectors, is expected to attract more offshore capital in both financial and technical capacities.
Sources told NATIONAL ECONOMY that investors have begun discussions with several companies, including Industrial and General Insurance (IGI) Plc, where foreign interests are said to be conducting due diligence.
“A number of them (foreign investors) are already in the country doing their assessment of the companies they are interested in,” a source disclosed. “In the next couple of months, some will also come as there are ongoing discussions between the investors and interested companies on stakes and other routine exercises. There are local investment interests too, but foreign investors are exploiting our weak forex to take substantial stakes in the nation’s insurance industry.”
The managing director/CEO of Universal Insurance Plc, Dr. Jeff Duru, said the recapitalisation would attract credible investors who will bring not only money but also expertise to further grow the sector.
“The ongoing exercise will attract foreign investors who will not only bring in their money but expertise too, to further grow and develop the nation’s insurance sector.
“Some of these investors have accrued expertise in countries where insurance works. Transiting such experience into the nation’s market — especially in digital penetration and product development — can do the magic of penetration post recapitalisation,” Duru said.
The chairman of the Nigerian Insurers Association (NIA), Mr. Kola Ahmed, who is also managing director/CEO of AXA Mansard Insurance Plc, said operators are happy with the process and optimistic about its outcome.
“Operators are happy with the ongoing exercise, and there are several options left for underwriters to recapitalise. Each operator will choose which option best suits its ambitions,” Ahmed said.
The president of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Babatunde Oguntade, urged company boards to ensure shareholders’ and policyholders’ interests are protected in their negotiations with both local and foreign investors.
“Boards of insurance companies must ensure that the interest of the policyholders and shareholders is at the centre of the dealings they are making with either local or foreign investors in the ongoing exercise,” Oguntade warned.
He expressed confidence that the post-recapitalisation industry would see improved claims settlement, better pricing of risks, and stronger investment outcomes.
“Post recapitalisation, insurers should improve in prompt payment of claims and appropriate pricing of risks, as well as invest funds to generate the right investment returns,” he said.
However, not everyone shares the optimism. The chairman of the Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said public shareholders are unlikely to reinvest heavily in insurance stocks due to previous poor returns.
“Public shareholders may not invest that much in insurance stocks because their previous investments have not yielded the needed returns and have not translated to consistent dividend payment,” Okezie said.
“Some of us bought shares at prices far higher than what is being quoted on the Nigerian Stock Exchange today. We will not risk reinvestment but rather sell our old stock when the price is right.”
He added that this trend could open up more space for private equity and foreign investors to take over shares dumped by public investors.
Meanwhile, the commissioner for insurance and CEO of NAICOM, Mr. Olusegun Omosehin, defended the recapitalisation exercise, describing it as “long overdue” and essential for strengthening the sector’s ability to participate in capital-intensive sectors dominated by foreign insurers.
“The ongoing exercise is extremely needed to expand the capacity of the sector to take substantial positions in lucrative but highly risky sectors such as aviation, oil and gas, and maritime, which are currently being dominated by foreign insurers because of their large financial buffer capacity.
“The business dynamics have long changed. Asset replacement value has increased, and the business of underwriting now demands more capital to meet necessary obligations,” Omosehin stated.
Following the passage of the Nigerian Insurance Industry Reform Act (NIIRA) in July 2025, insurance and reinsurance firms were given 12 months to comply with the new capital requirements. Under the law, life insurers must raise capital from ₦2 billion to ₦10 billion, non-life insurers from ₦3 billion to ₦15 billion, and reinsurers from ₦10 billion to ₦35 billion — representing about a 500 per cent capital increase.
The Act states under Part IV, Section 6: “An insurer registered before the commencement of this Act shall comply with the requirements within 12 months of the commencement of this Act.”
Unless NAICOM extends the deadline or grants waivers, insurers and reinsurers have until July 2026 to meet the new capital requirements.
Omosehin maintained that the recapitalisation would position the industry for sustainable growth, attract new investments, and enhance its global competitiveness.
