Nigeria’s insurance companies are largely opting to raise fresh capital rather than pursue mergers as they race to meet new minimum capital thresholds in the ongoing recapitalisation programme.
With about six months left to the July 30 compliance deadline set by the Nigerian Insurance Industry Reform Act (NIIRA) 2025, there has been little evidence of serious merger talks among insurers. Instead, market activity points to preparations for capital raising, with several firms exploring options that include public offers, private placements, rights issues, equity conversions, or a mix of these instruments.
Emeka Uwana, an investment banker advising insurance companies in the ongoing recapitalisation exercise, said the strategic preference for fresh funds against mergers highlights a shifting landscape in the insurance sector.
According to Uwana, most insurers are focused on strengthening their competitive positions while preserving their independence.
“The decision to prioritise capital raises over consolidation reflects confidence in internal capabilities and optimism about future opportunities in the industry,” he said.
Eddie Efekoha, group managing director of Consolidated Hallmark Holdings, said: “We have fully complied with the recapitalization requirements so far, submitting all reports on time, and we are ready for verification of our two licences.”
On the possibility of mergers or acquisitions, Efekoha said Consolidated Hallmark is not actively pursuing such options for now.
“New opportunities may arise, but we are currently focused on stability following previous mergers.”
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He further stated that the company must be prepared, particularly in terms of culture, rather than cash or other tangible issues. “Cultural issues are often what make organisations fail. We are not ready in this regard, so it has become a capital issue,” he stated.
“To the extent that we have met the requirements, it is fine. If anything arises in the future, we cannot rule it out, but we must see clear value in any acquisition,” Efekoha said.
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Firms explore market options
At the last count, SUNU Assurance, Linkage Assurance, Veritas Kapital, IEI Insurance, Regency Alliance, Universal Insurance and Guinea are among insurers positioning themselves to explore the capital market for fresh funds.
SUNU Assurances Nigeria Plc had earlier secured its shareholders’ approval to raise N9 billion to meet new statutory capital requirements.
At the company’s Extraordinary General Meeting (EGM) held in Lagos recently, shareholders endorsed multiple resolutions empowering the board to initiate a capital-raising programme through rights issues, public offers, private placements or a combination of fundraising vehicles.
The board also received approvals to adjust share capital, engage professional advisers, and list new shares on the Nigerian Exchange (NGX).
Kyari Abba Bukar, chairman of SUNU Assurances, underscored the strategic importance of the recapitalisation, noting that NIIRA 2025 increased MCR for non-life insurers from N3 billion to N15 billion with a compliance deadline of July 30, 2026.
“The recapitalisation is critical to ensuring solvency, supporting underwriting expansion and maintaining competitive strength in the post-reform landscape,” Bukar said.
Linkage Assurance Plc has also held its EGM, securing shareholders’ approval to raise additional N16 billion by way of either private placement, rights issue, public offers or a combination.
Similarly, Regency Alliance, at its recent Annual General Meeting (AGM), gave the directors the approval to increase the share capital of the company by way of private placement, public offer (with or without a preferential allotment) or rights issue or a combination of any of them within Nigeria or internationally, and “upon such terms and conditions that the directors may deem fit in the interest of the company subject to regulatory compliance and approval.”
Also, Veritas Kapital Assurance Plc received shareholder approval to raise up to N15 billion, or such other amount as may be determined, through a private placement on terms and conditions set by its Board.
Universal Insurance Plc, at its recent EGM, also obtained approval to raise N15 billion via public offers, private placements, rights issues or a mix of funding models locally or internationally.
More so, Guinea Insurance Plc has authorised its board to raise up to N15 billion in additional equity capital to meet National Insurance Commission (NAICOM) requirements, strengthen its balance sheet and support strategic growth plans.
Commenting on the broader implications of the reform Idu , Okeahialam, group managing director/CEO, Royal Exchange Plc, said the NIIRA 2025-induced recapitalisation process will reposition the Nigerian insurance market in 2026 and beyond.
In a statement entitled, ‘Recapitalisation and the Future of the Nigerian Insurance Market: A 2026 Outlook,’ she maintained that a well-capitalised insurance industry sends a strong signal of financial strength and reliability, which is essential in rebuilding trust among policyholders who have historically viewed the Nigerian insurance industry with scepticism due to delayed claims and weak service delivery.
The Nigerian Insurance Industry Reform Act (NIIRA) 2025 signed by Bola Ahmed Tinubu, Nigeria’s president, on August 5, 2025, introduced higher MCR for insurance and reinsurance companies, giving them till 31st July 2026 as deadline for compliance.
Under the new regime, life insurers must meet a minimum capital base of N10 billion, general insurers N15 billion, composite insurers N25 billion and reinsurers N35 billion, alongside a transition to a risk-based capital framework.
