Nigeria raises insurance capital requirements fivefold, sets one-year deadline

Nigeria has raised insurance capital requirements significantly under a directive issued by the National Insurance Commission (NAICOM) as part of sweeping reforms following the enactment of the Insurance Industry Reform Act. Insurers are now required to raise their capital from N3 billion to N15 billion, with life insurers needing to increase from N2 billion to N10 billion, and reinsurers from N10 billion to N35 billion.

This move aims to enhance the sector's capacity, improve claim settlement, and boost investor confidence. The announcement has been met with a positive response in the capital market, with insurance stocks on the Nigerian Exchange (NGX) closing nearly 8% higher.

The reform is part of President Bola Ahmed Tinubu's broader economic agenda to expand Nigeria's economy to $1 trillion by 2030. Industry leaders have expressed support for the legislation, recognizing its potential to deepen insurance penetration and align Nigeria with global standards.

The reform is also expected to trigger a wave of mergers and acquisitions.