Insurance Commissioner Olusegun Omosehin has said the National Insurance Commission’s original goal at the start of its recapitalisation exercise was that no underwriting firm would fail as a result of the process. Six insurance companies ultimately lost their operating licences, and Omosehin said the outcome reflected the firms’ own resistance to merging rather than any intent by the regulator to force them out.
Read also: Nigerian stock market gains N4.6tn in a week as banking and insurance stocks rally
What Omosehin says happened
Giving an update on the recently concluded recapitalisation and relicensing exercise, Omosehin said he personally invited the chairmen, boards and management of struggling firms to closed door meetings, pleading with them to consider mergers once it became clear they could not meet the new capital thresholds alone.
He said the owners of the six affected firms insisted they would meet the requirements independently and declined the merger route he had proposed. A regulator that has to talk companies into merging, rather than simply enforcing a deadline and walking away, is one that understands what a licence loss actually costs the policyholders and businesses depending on that insurer.
Read also: Insurance recapitalisation deadline arrives today as NAICOM holds firm on compliance
Why this matters for SMEs
Insurance recapitalisation under the Nigeria Insurance Industry Reform Act 2025 has already been linked to stronger risk retention for manufacturers, with a recent Pan-African Manufacturers Association report noting that better capitalised insurers can now absorb larger industrial risks that previously required expensive foreign reinsurance.
For small businesses that rely on cover for goods in transit, business interruption, equipment and liability, the departure of six underinsured firms removes weaker counterparties from the market, but it also concentrates risk among fewer, larger players. An insurance sector with fewer but stronger operators only benefits SMEs if the survivors compete on price and claims speed rather than simply on scale.
What comes next
Omosehin’s comments come as the industry moves into a consolidation phase, with policyholders of affected firms being transitioned to new arrangements under NAICOM supervision. For business owners currently shopping for cover, the message from the regulator is that the surviving insurers are the ones that met the higher capital bar on their own merit, a distinction NAICOM is keen for the market to trust.
