Recapitalisation: Operators, Stakeholders Express Divergent Views, Fault Release of 43 Firms When 8 Under Verification

Ebere Nwoji

Mixed reactions have trailed the recent announcement on the conclusion of the 12-month long recapitalisation exercise in insurance sector by the sector regulator, the National Insurance Commission (NAICOM), as operators, other stakeholders express diverse views on the concluded exercise.

While operators and other arms of the industry praised NAICOM the regulator congratulating it for a successful conclusion of the exercise, shareholders faulted the release of the names of successful 43 firms when eight firms were still undergoing verification exercise with NAICOM.

The commission had Sunday released list of 43 insurance firms that have successfully crossed the recapitalisation hurdle and informed that eight other insurance firms are still undergoing verification process.

Reacting to the development, the immediate past Chairman of the Nigeria Insurers Association (NIA), the umbrella body of all insurance underwriting companies, Mr. Kunle Ahmed, spoke about his own company AXA Mansard Insurance where he works as the Managing Director saying “Following the rigorous minimum capital verification process conducted by PricewaterhouseCoopers (PwC), the auditors appointed by NAICOM, we are pleased to announce that we have successfully met the recapitalisation hurdle and satisfied the minimum capital requirement stipulated by the NIIRA Act.

He however said though his company AXA made the recapitalisation list, the company would not rest on its oars bearing in mind the fact that the Nigeria Insurance Industry Act (NIIRA 2025) which stipulated the recapitalisation process further required that each insurer held the higher of the minimum capital or the risk-based capital.

“We therefore look forward to the release of the risk-based capital framework by NAICOM. 

“Our commitment is to not only meet but exceed the risk-based capital requirements. This additional capital buffer will enable us to:

Strengthen our financial resilience, enhance our capacity to underwrite larger and more complex risks, maintain strong claims-paying ability, even under adverse market conditions.

Ahmed also said the new capital would accelerate the actualisation of his company’s   digital transformation journey as well as position the company for sustainable growth and long-term value creation.

Speaking on the development, the Executive Secretary Nigerian Council of Registered Insurance Brokers (NCRIB), the umbrella body of all licensed insurance brokers in the country, Mr. Tope Daramola, said the entire insurance industry should be congratulated this time especially NAICOM which has successfully midwifed another capitalisation exercise in the industry.

“This recapitalisation is quite timely now more so to give the desired impetus to the NIIRA Act 2025 which gives larger provision for larger space to the insurance industry in Nigeria.

“With the recapitalisation of insurance companies, we are talking about enhanced capital base for the industry which will cure the challenge of image or reputation of the industry”, he said.

He further said: “You will recall that one of the strongest albatross on the neck of insurance industry is actually that of capacity and on this note the industry has not been able to maximise fully its potential. But with this enhanced capacity now, the industry has what it takes to carry risks regardless of the magnitude. You must bear in mind that this is even the minimum capital requirement so you have companies that are way way ahead in terms of their capitalisation”, he stated.

According to him, it is a good development and the insuring public are to take advantage of this.

He said with higher capital, insurance companies also must broaden their mind so that the capital can be put into adequate use through their creative ingenuity in being able to provide products that Nigerians need so that we will not just be looking at capital using it for investment but for core underwriting.

However, a prominent shareholder and Chairman of Independent Shareholders Association of Nigerian, Mr. Boniface Okezie, queried why the regulator should rush to publish the list of 43 firms when it knew that there were still eight firms still under verification.

He said this shouldn’t have been more so as the eight firms have already submitted their capital raising documents and NGX has approved them.

“By rushing to the public to disclose the number of insurance companies that have metthe requirements what do they meant by that? What they should have done is to say yes, we have received the list of 43 who submitted the capitals raised but we still have with us those who have submitted to the commission for the same verification but as soon as we are done with the verification, we will also make it know to the public.

Okezie asked: by rushing to say 43 companies have made it, what happens to the remaining eight companies that are with them? does it mean they will die.

“By this their action they have created panic mood among investing public in the Insurance sector, and why did it take them all that long to carry out verification exercises?

They need to do what they want to do fast so that people can begin to have their shares allotted to them and credit into their accounts in CSCS so that many can start to trade on them,” he stated.