As the new year rolls in, operators in the Nigerian insurance market believe that recapitalisation and collaboration will drive the industry agenda in 2026.
For instance, following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 on 31 July 2025, the National Insurance Commission (NAICOM) rolled out a 12-month recapitalisation exercise for insurance and reinsurance companies operating in the country under a risk-based capital (RBC) model.
The NIIRA 2025 legislation introduced a higher minimum capital requirement of ₦10 billion (US$7 million) for life, ₦15 billion ($10.5 million) for non-life, ₦25 billion ($17.6 million) for composite and ₦35 billion ($25.6 million) for reinsurance companies in Nigeria with a deadline of July 2026.
Recapitalisation help desk
Kunle Ahmed, chairman, Nigerian Insurers Association (NIA), in his new year message to industry CEOs, said that NIIRA 2025 created a stronger framework for insurance penetration, governance and sustainable growth through strong capitalisation.
“As 2026 begins, the priority is its effective implementation through collaboration among companies, regulators and stakeholders. The NIA has pledged continued support via advocacy, guidance, capacity-building and plans to establish a recapitalisation help desk to assist members during the transition.”
He said the market should also look forward to deeper collaboration in 2026 to usher in a new era of growth and public trust in the insurance industry. He expressed confidence that with co-operation, transparency and shared responsibility, the market will consolidate the gains of 2025 and thrive better in 2026.
Idu Okeahialam, group managing director of Royal Exchange Plc, said the introduction of NIIRA 2025 leaves the insurance industry standing at a defining moment.
“While the sector has long grappled with issues of inadequate capital, leading to poor claims settlement capacity and limited market penetration, limited underwriting capacity and trust deficit, the ongoing recapitalisation drive has emerged as the most consequential reform shaping its future direction,” said Okeahialam.
“It is intended that insurers must meet the new minimum capital requirement, aimed at protecting the consumers and positioning the industry for sustainable growth.”
Okeahialam insisted that recapitalisation is not merely a regulatory requirement but a structural reset that will determine the credibility and long-term relevance of the industry.
“By [end of] 2026, recapitalisation will have reshaped the competitive landscape. The industry is likely to witness a leaner but stronger market, characterised by fewer operators with improved financial capacity, stronger governance frameworks, and enhanced risk management practices.
Insurers that emerge successfully from the recapitalisation process will be better equipped to absorb shocks, support national economic activities and partner meaningfully in other high-value sectors.”
Pressure for small insurers
Okeahialam warned, however, that recapitalisation will not be without challenges.
“While the objectives outlined in the Act are commendable, the increased capital requirements may pose significant challenges for smaller players, potentially leading to market consolidation and reduced competition. While this may initially be disruptive, I believe it will ultimately strengthen the industry by eliminating weak structures and encouraging scale and efficiency.”
The Royal Exchange boss added that recapitalisation must go beyond balance sheet expansion as capital alone does not guarantee stability or performance.
“The true test for insurers in 2026 will be measured by the effective deployment of capital, whether it translates into prudent underwriting, timely claims settlement and improved customer experience,” she said.
“Without corresponding improvements in governance, and enterprise risk management, recapitalisation risks becoming a cosmetic exercise rather than a transformative one. From a market confidence perspective, successful recapitalisation as proposed by the Act has the potential to significantly improve public perception of insurance in Nigeria.”
Fresh round of consolidation
Ezekiel Oloriegbe, former corporate services executive at VeritasKapital Assurance Plc, said 2026 could be another year of consolidation—like it happened about two decades ago—as insurance companies feel the pressure to shore up their capital.
Many will make it. Many will fake it. And many may go down or merge. So, in that sense, this year is like 2007; another consolidation year that saw the merger of many companies and the disappearance of many companies. Upstart insurers who will want to make a challenge for the top spot will have their attention distracted by the rigours of recapitalisation,” said Oloriegbe.
Jide Orimolade, managing director, Stanbic IBTC Insurance Limited, said: “I think there should be more collaboration and we should enforce corporate governance. [We should] push compulsory insurance in collaboration with the regulator [and] encourage inroads of insurtech in the market.”
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