As Nigeria’s insurance industry approaches the final phase of recapitalisation, experts have shifted attention from capital adequacy, warning that insurance’s long-term success would depend on its ability to innovate, improve efficiency and expand market reach.

The warning comes as insurance companies intensify efforts to meet new capital requirements under the Nigerian Insurance Industry Reform Act (NIIRA) 2025, with operators raising fresh funds and restructuring their balance sheets ahead of regulatory deadlines.

Stakeholders argued that while recapitalisation would strengthen the financial capacity of insurers, sustainable growth would depend on how effectively companies deploy their capital to deepen insurance penetration, improve customer experience and enhance risk management.

Speaking at the 2026 Inspenonline Retirement Summit, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the next phase of competition in the industry would be driven by innovation rather than capital size alone.

According to him, insurance firms that emerge as market leaders after recapitalisation would be those capable of developing products that address the needs of underserved segments of the economy, particularly workers in the informal sector.

“Firms that will dominate the next phase of industry growth will not necessarily be those with the largest capital base. They will be institutions that can redesign financial protection around the realities of informal sector economics,” Yusuf said.

Chairman of the Nigerian Insurers Association (NIA), Kunle Ahmed, noted that previous recapitalisation exercises in Nigeria’s financial services sector had shown that stronger capitalisation, though important, does not automatically translate into profitability or market dominance.

Another expert, Chuks Emeka, said the post-recapitalisation era would require insurers to become more agile, technology-driven and customer-focused.

“Capital is merely an entry ticket into the next phase of competition. The real challenge is how operators deploy the resources to strengthen governance, improve service delivery and build customer trust,” he said.

Industry stakeholders identified digital transformation, product innovation, human capital development and prompt claims settlement as critical factors that would determine success in the post-recapitalisation environment.

They stressed that investment in InsurTech platforms, artificial intelligence-driven claims management systems and mobile distribution channels would also become increasingly important as consumer expectations evolve.

They urged insurers to develop tailored products for retail customers and informal sector operators, noting that low insurance penetration remained one of the industry’s biggest challenges.