Insurance underwriters are coming under increasing pressure from their broker partners, who are demanding clarity on recapitalisation plans before placing new business with them.
The scrutiny has intensified ahead of the 2026 renewal season, as insurance brokers, who control more than 70 percent of the industry’s market share, become more selective about where they place risks. Brokers say they are keen to understand how underwriters intend to meet the new minimum capital requirements set for the industry.
Under the directive, insurance companies have until July 30, 2026, to shore up their capital base to new thresholds: N15 billion for general insurance firms, N10 billion for life insurers, N25 billion for composite firms and N35 billion for reinsurers.
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Toba Olusesi, an insurance broker, said: “We are being careful not to place business with a company that will not survive after July 2026, so we are curious about their plans and strategies to remain in business.”
According to him, his brokerage firm has asked all the underwriting partners to submit their recapitalisation plans before they can be considered for any new placement in 2026.
“We are becoming more demanding and selective because we want to know how they will meet the regulatory requirement, he said.
Chijioke Nwafor, managing director, Crystal and Diamond Insurance Brokers Ltd, responding to questions as to what brokers are doing in respect of the recapitalisation and their relationship with underwriters, said: “As a broker, your primary duty is to protect the interests of your client, and if an underwriter’s recapitalisation plan is not satisfactory, you simply move the business elsewhere.”
He emphasised further that, “It is only reasonable for brokers to evaluate the recapitalisation plans of underwriters before placing business.”
“If you are not satisfied with the recapitalisation plan, you move your business elsewhere. Simple, you do not want to find yourself queuing up with creditors when the company is eventually wound up. That is not necessary.”
According to him, “There are some underwriters we already know quite well and are confident that they have exceeded expectations. But for those you are not too sure about, it is better to ensure they have a very solid plan in place before placing any business or renewal with them. That is simply the truth.”
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Usman Jankara, deputy commissioner for Insurance, Technical, NAICOM, speaking at an insurance forum in Lagos, said the industry’s response to the recapitalisation order has been encouraging, with about 18 insurers already indicating their readiness for capital verification.
Jankara said boards of insurance companies have approved fresh capital injection strategies, while others are pursuing mergers and operational restructuring as part of their recapitalisation plans.
“Our approach remains principle-based, providing clarity and certainty while fostering innovation, because our goal is not compliance for its own sake,” he said.
Responding to questions from underwriters on how they are being pressured by brokers, Jankara said, “It is not our responsibility to check how brokers will carry out their due diligence on their underwriting partners. They are part of the market and they are responding to the environment.”
On whether the recapitalisation will disrupt the market, Chijioke Nwafor, who is also a council member of the Nigerian Council of Registered Insurance Brokers (NCRIB), noted that “it depends on the plans the underwriting companies.”
He said if all their recapitalisation plans are in order, then it may not disrupt the market significantly. But if the plans are not adequate, he said, then there could be challenges.
“That said, I doubt if there is any company today that does not have some form of solid plan in place. Still, as brokers, we are taking our time to ensure our clients’ interests are fully protected,” he noted
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“Now, let us assume a company is considering a merger or an acquisition. Would that give you enough comfort to continue placing business with them? It depends on the nature and level of the merger, and again, on the plan on the ground.”
According to him, the capacity the industry once had is shrinking, and the real reason is the devaluation of our currency.
“Personally, I would have preferred full implementation of the risk-based policy. Instead, they introduced a dual window: either risk-based capital or capitalisation up to a fixed amount. Sometimes, this creates confusion. If the intention is risk-based capital, then it should be implemented fully and clearly.”
This challenge, he noted, is even more pronounced with commercial airlines such as the Boeing 737 series. “As brokers, this affects us because once we placed risks internationally. The majority of the commission ends up going to the international market.”
