NAICOM Upgrades Minimum Capital for Micro Insurance Firms to N3bn

Ebere Nwoji

The National Insurance Commission (NAICOM), is set to increase the minimum capital base of insurance firms underwriting Micro Insurance businesses from the present level of N40 million  for unit, N100 million for state and N600 million  for National Micro insurance firms to N3 billion.

This is contained in the Nigeria Insurance Industry Act (NIIRA2025)  on minimum capital base for operating firms.

Though the commission had while spelling out the minimum capital base for life,  at N10 billion,General business  at N15 billion and reinsurers at N35 billion, it has  been silent on what constitutes  new minimum capital base for micro insurance.

THISDAY gathered that the commission may settle  at N3 billion as uniformed minimum capital base  for micro insurance firms effect from this month.

This replaces the older tiered structure, aiming to strengthen financial capacity for nationwide low-income coverage. 

The previous structures of N40 million for unit  microinsurance firm,  N100 million for state and N600 million for national Micro insurance operators are being phased out in favor of the new, higher requirement. 

Going by the guidelines the target market for the micro insurance are; low-income individuals, micro-entrepreneurs, and underserved communities.

The product has to be  simplified policies with low-value, easy-to-understand terms tailored to the target market.

The initial channels for its distribution are  agents, cooperative societies, non-governmental organisations (NGOs), faith-based organisations, and mobile payment systems.

The Nigeria Insurance Industry Reform Act (NIIRA) 2025 promotes microinsurance to increase financial inclusion for underserved and rural populations, with a focus on tailoring, regulating, and integrating these products into the broader insurance market.

The Act enables specialised products and requires digitisation for increased access. 

The act recognises microinsurance as a vital component for enhancing market penetration and widening coverage to underserved populations.

It encourages collaboration between key stakeholders, including the Central Bank of Nigeria (CBN), to develop tailored, affordable insurance products.

NAICOM is mandated  by the Act to provide specific regulatory frameworks and guidelines to foster the growth of microinsurance, alongside takaful and agricultural insurance.

On its distribution, the  Act encourages the use of digital tools and web aggregators to distribute micro-insurance products effectively and to enhance  access. 

List of Micro insurance firms licensed by NAICOM include: Goxi Micro Insurance Limited, Sagamu Micro insurance Limited, Cassava Micro Insurance CHI MicroInsurance Limited, Creditstar Micro insurance,  Prudent Choice micro insurance, LifeguardMicro Insurance among others.