The insurance industry is on a major realignment as renewed interest from local and foreign investors accelerates stake acquisitions in underwriting firms, driven by the impending recapitalisation requirements of the Nigerian Insurance Industry Reform Act (NIIRA).
With new capital thresholds expected to reshape the market, the sector is witnessing heightened merger and acquisition (M&A) discussions, signalling what industry stakeholders described as the most consequential restructuring since the 2005 recapitalisation exercise.
Multiple industry sources confirmed that institutional investors and private equity firms are currently in talks with insurers seeking strategic partnerships or outright buyouts to meet the enhanced capital requirements.
Speaking on the development at the weekend at an industry forum, the Commissioner for Insurance, Olusegun Omosehin, said the NIIRA framework aimed to strengthen operators’ financial capacity, improve shock resilience and position insurers to underwrite large and climate-related risks.
“When institutions are adequately capitalised, they can collaborate across the continent to pool resources and manage high-impact risks more effectively,” Omosehin said.
“This is not just about compliance; it is about building resilience and ensuring underwriters remain reliable contributors to national development,” he added.
He noted that the Commission is monitoring operators’ solvency positions, claims settlement patterns and governance structures to safeguard policyholders and sustain public confidence.
A former president of the Nigerian Council of Registered Insurance Brokers (NCRIB), Babatunde Oguntade, projected that about 60 per cent of insurers are on track to meet the requirements independently, while the remaining 40 per cent may consolidate through mergers, acquisitions or equity injections.
“With the pace of ongoing reforms, we expect insurance penetration to rise to at least three per cent within the next three years, driven by stricter enforcement of compulsory insurance and a more vibrant broker network,” Oguntade told The Guardian at an industry event in Lagos.
Data from the Nigerian Exchange (NGX) show rising investor appetite, reflected in increased share prices of listed insurance companies and a surge in capital inflows.
Stakeholders at the forum also highlighted stronger underwriting income, improved claims ratios and accelerated digital adoption as indicators of the industry’s upward trajectory.
