As Insurers Flock Stock Market Amidst Recapitalisation Fever 

As deadline of July 31,  2026 given to insurance companies to shore up their capital  draws closer, Ebere Nwoji looks at trends in the market and possibility of firms wishing to raise money from the stock market achieving  their desired success.

Four  months to the end of recapitalisation mandate  in insurance industry,  precisely July 31,2026, there is palpable fear of volatility in the performance of insurance sector in terms of market value, investor confidence and possibility of operating firms seeking to raise capital from market achieving reasonable success.

But before now the sector  has been showing positive signs  of growth in terms of  overall performance. 

For instance, few months after the  National Insurance Commission (NAICOM) announcement of the recapitalisation as mandated by the Nigeria Insurance Industry Act (NIIRA 2025), insurers and industry analysts were in the upbeat of heart due to positive signs shown in the operations of the sector. Precisely, in December 2025, the NGX Insurance Index Return showed +65.64 percent growth.

Insurance sector contribution to NGX  was at 0.97 per cent of total market cap (as of Dec 2025), up from a lower base. The combined market value of the top 10 insurers was over N1 trillion (as of Sept 2025). Estimated fresh capital to be raised  was put at approximately  N600 billion while total gross premiums (H1 2025) was N1.98 trillion up 54.2 per cent YoY. These figures came from both NGX daily weekly report and National Bureau of Statistics. 

Sector analysts said  NAICOM’s latest regulatory push was  directly translating into significant increase in the market value of insurance firms, with the NGX Insurance Index delivering a 65.64 per cent return in 2025 just as investors expected a stronger, more credible industry.

NBS Report

A forthright ago, report by the National Bureau of Statistics (NBA) positioned insurance sector as recording highest growth among other finance services sectors of the economy in the last quarter of 2025, saying insurance sector recorded a massive surge of 21.37 percent even above banking sector. This was attributed to on going recapitalisation exercise and the new regulation in the industry NIIRA 2025, which NAICOM the regulator tagged “industry game changer.”

Indeed going by the recapitalisation update given  by NAICOM intermittently since the announcement of the  recapitalisation mandate in August 2025,the Nigerian insurance sector is currently experiencing a profound transformation driven by the mandate.

However as the deadline for the recapitalisation draws near, a kind of volatility especially in the market value of insurance set in.

While latest report on banks whose recapitalisation deadline elapsed yesterday (Tue March 31st, 2026)  said at the last count (as at Mon March 30th), the exercise  caused the market value of 13 banks listed on Nigerian Exchange to quadriple as new capital raised and capital gained lifted banks’ market value above N20 trillion. In the insurance sector, the top ten listed insurers as at Q3/Q4 2025, combines market capitalisation exceeding N1 trillion. This analysts said showed investor confidence in the quoted firms. Expectations were high that the best will come this year.

Industry Boom

However since early this year, though the big 10 insurers are still waxing strong, on a general note, insurance market value has been very fluctuating. By March 30th 2026, insurance index dropped by 1.4 per cent  according to NGX report. Further report shows that the sector market value in recent times experienced volatility as a whole. While a report says the sector witnessed -4.6 per cent weekly decline subsequent report on the sector’s market value said it gained 2.14 per cent on the single day.

Summaringly in March going by NGX report the Nigeria insurance sector index has delivered a year -to-date return of6.6 percent 

This fluctuation has heightened now that more insurance firms are approaching the NGX for capital raising. Among those wooing investors in the NGX market are: Guinea Insurance seeking for N5.8 billion through rights issue, Linkage Assurance seeking for N16.3 billion offer, Lasaco Assurance seeking to raise N18.47 billion, SUNU Assurance for N9.34 billion, Sovereign Trust looking for N5.02 billion and Universal Insurance looking to raise N15 billion.

These companies have announced their capital raising programms on the NGX and the amount they are seeking and have announced same to the media. Some have already met the statutory requirements with regulators like the CBN and have effected the statutory deposits required.

The challenge

But what is worrisome is that what is happening at the floor of Nigeria Exchange on the part of quoted insurance firms does not give joy to operators and finance analysts.  In fact, finance and investment experts said it falls below expectation and poses danger especially to small and weak firms approaching the market for capital raising.

This is because in their interpretation of the situation, rights issues are typically priced at a discount to the current market price to encourage uptake. High volatility  therefore makes it difficult to set a stable discount.

In the view of the analysts, if market price falls below the rights issue price after announcement, the offer becomes unattractive, risking under‑subscription.

They further said if the price swings upward, the discount might appear overly generous, leading to oversubscription and potential shareholder dilution where renounced rights were  taken up by new investors.

For public offers,  the analysts said volatile share prices could  deter retail investors who fear that the price might drop immediately after they subscribe, eroding the value of their  investment.

They were also of the view that heightened volatility often signaled uncertainty about a company’s ability to meet the recapitalisation deadline or its future profitability and this could  weaken investor confidence, especially among minority shareholders.

 Again institutional investors might demand larger discounts or more favourable terms to compensate for risk, squeezing the company’s ability to raise the full target amount.

They further said with volatility, firms with volatile stocks might  experience low subscription rates, forcing them to extend offer periods, rely on underwriters, or seek alternative funding (e.g., private placements) at higher costs.

For now none of these firms in the market has confirmed to the media that their offers have been fully subscribed. Some of their workers who spoke to THISDAY on anonymity ground said performance was below expectation but that there was hope that market would pick up.

NAICOM’s Stand

At the last media chat with the commissioner for Insurance, Mr  Olusegun Ayo  Omosehin, he clearly stated that no single insurance firm had crossed recapitalisation huddle .He however said July 31st deadline remained sacrosanct 

Omosehin, however said no less than 20 insurance underwriting firms have officially written the commission on their recapitalisation efforts informing the commission that they were ready for verification.

He said given this information, his office had assigned verifiers to look into their books and report back to his office within a timeframe of three weeks.

In his response to  journalists’ question on the possibility of grace period for the exercise to enable firms meet the required minimum capital and remain in business, Omosehin said the July 31st recapitalisation deadline was sacrosanct and would not be shifted for any reason.

According to him, it goes beyond his power as insurance commissioner because it was stated by NIIRA25 and cannot be shifted by any authority except with the amendment of the law.

He said currently all insurance firms in the system were going through NAICOM’S scanning machine and that the result of the scanning would soon be made known.

He however said NAICOM as regulator encouraged insurance firms who did not have a stand alone stamina to go into marriages with other companies to be able to remain alive.

He however said the problem the operators had in the past which is likely going  to happen again is that as many are going through  public offers, right issues, private placement, their investors usually raise hopes of bringing in money thereby making the firms not to look for mergers and acquisition but that at the dying minute, they would come up with excuses on why they could not bring in money by that time the deadline would have been at hand and the companies would began to look for merger with any available firm if only to remain in business.

He said such emergency mergers come with problem as he pointed that in the previous recapitalisation,  a good number of operating firms who consummated such adhoc mergers carried a lot of liabilities which  some of them are still grappling with. He advised operating firms to make adequate arrangement in their bid to meet the recapitalisation exercise.

NIIRA 2025  

But the President of Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Ekeoma Ezeibe is very optimistic that with the new insurance regulation in place, there is no doubt that th sector would take its pride of place in the economy.

He attributed the drivers of growth witnessed in the industry to the signing of  the NIIRA 2025 by president Bola  Ahmed Tinubu.

“NIIRA is a transformative insurance  legal framework that has provided for so many things among which are the increase in the share capital of insurance  industry  through risk base or minimum  capital requirement whichever is higher.

 “NIIRA also increased the professional indemnity of insurance  brokers to N100bn or 50 percent of each company’s previous year’s revenue which ever is greater”. “NIIRA went on to strengthen claims processing  measures  so that customers’ trust in insurance  is enhanced”.

She noted that other  protective measures it has put in place include  shorter period of time to settle claims, creation of accident victim compensation fund for victims of uninsured drivers or hit and run drivers  adding that it also created policy holders protection fund for insurance companies that have become insolvent.

“The act gave the regulator the power to settle claims from statutory deposit of any insurer with the CBN an insurer who have not settled claim within the time the law allows, it also increased fines and penalties that the regulator will give operators who have committed one infraction or the other,” she stated.

While hopes are high on NIIRA 2025 as the insurance sector’s game changer, operators who want to remain in business should take clue from what  the  insurance commissioner  said happened to firms in the past exercise and begin on time to  run  against the rain before it drenches them.

Following the signing of NIIRA2025 insurance firms were mandated to shore up their operating capital from N2 billion to N10 billion for firms underwriting life business, from N3 billion  to N15 billion for general business underwriters and from N10 billion to N35 billion for reinsurers. The firms were given between August 2025 to July 31st 2026 to meet the new capital requirement.