Nigeria Insurance Firms Race Against Recapitalization Deadline, Shun Mergers

Nigerian insurance companies are scrambling to meet a looming recapitalization deadline, with just 11 days left until July 31. None of the country's 60 insurance and reinsurance firms have pursued mergers or acquisitions as a strategy to meet the new capital requirements set by the National Insurance Commission (NAICOM).

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the problem with insurance operators was that they hardly wanted to consider merger option.

Instead, these firms are focusing on raising capital through the Nigerian Exchange (NGX) market. Several companies, including Guinea Insurance, Linkage Assurance, Lasaco Assurance, SUNU Assurance, Sovereign Trust, and Universal Insurance, are actively seeking billions of naira through rights issues and other stock market offerings. Capital market reports indicate that eight insurance firms are collectively trying to raise about N78.66 billion.

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Many companies have made significant progress, I don’t have merger details.

Commissioner for Insurance, Mr. Olusegun Omosehin, noted that operators are hesitant to consider mergers, a strategy that has proven difficult in past recapitalization exercises due to investors withdrawing at the last minute. While some firms have made significant progress in attracting investors, the lack of merger activity suggests a preference for maintaining standalone operations. Staff from NAICOM and the Nigeria Insurers Association (NIA) confirmed that merger details are not readily available, indicating a general lack of concrete plans in this area.

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The recapitalisation process is still on, there is no merger information at our disposal.