• Insurers and reinsurers must comply with new capital requirements within 12 months or lose licenses.
• Life, non-life, and reinsurance companies face steep hikes in minimum capital, up to ₦35 billion.
• Despite strong revenue growth, Nigeria still contributes only 2.1% of Africa’s total insurance premiums.

Nigeria, Africa’s most populous country, still lags in insurance, contributing just 2.1% of the continent’s total premiums. Regulators want to change that.

On Wednesday, August 13, the National Insurance Commission (NAICOM) ordered insurers and reinsurers to raise their minimum capital within 12 months or lose their licenses.

The new law, recently signed by President Tinubu, raises capital thresholds to strengthen financial stability, improve claims settlement, and attract investment. Life insurers, for instance, must now hold at least ₦10 billion ($6.52 million), up from ₦2 billion.Property and casualty insurers in Nigeria must raise their minimum capital from ₦3 billion to ₦15 billion, while reinsurers face an increase from ₦10 billion to ₦35 billion.

To enforce the new requirements, the National Insurance Commission (NAICOM) created an 11-member committee to ensure transparency and verify that funds are raised legitimately.

President Bola Ahmed Tinubu signed the Nigerian Insurance Industry Reform Act (NIIRA) into law on August 5. The legislation strengthens the financial soundness of insurers, pushes digitization, and protects consumers through mandatory policies and a guarantee fund to cover bankruptcies.

Nigeria’s insurance sector remains small compared with peers. In 2024, companies generated ₦1.562 trillion ($1 billion) in revenues, up 56% from 2023, according to the Nigerian Insurers Association. Non-life premiums contributed ₦1.092 trillion ($705.5 million), life premiums ₦470 billion ($303.7 million), while claims paid totaled ₦622 billion ($401.8 million). Nigeria captured just 2.1% of Africa’s insurance premiums in 2023, far behind South Africa at 68.2%, Morocco at 8.7%, Egypt at 4%, and Kenya at 3.9%, the African Insurance Organization (AIO) said in its 2024 report.

Walid Kéfi