With just eleven days left before the insurance sector’s July 31 recapitalization deadline set by the National Insurance Commission, none of the 60 existing insurance and reinsurance firms has pursued a merger or acquisition as a survival strategy, and no company has yet been confirmed to have met the required capital threshold.
Findings show operators are still struggling to raise capital independently, generally preferring to attract investors through the Nigerian Exchange rather than dilute ownership through mergers. Among firms currently seeking funds on the exchange are Guinea Insurance, seeking 5.8 billion naira through a rights issue; Linkage Assurance, seeking 16.3 billion naira; Lasaco Assurance, targeting 18.47 billion naira; SUNU Assurance, seeking 9.34 billion naira; Sovereign Trust, seeking 5.02 billion naira; and Universal Insurance, targeting 15 billion naira. Regency Insurance is also raising funds through similar mechanisms, including rights issues, private placement and equity injections from existing shareholders. Recent capital market reports show eight insurance firms together seeking an estimated 78.66 billion naira through various capital raising options.
Commissioner for Insurance Olusegun Omosehin said operators have historically been reluctant to consider mergers, recalling that in past recapitalization exercises, prospective investors often withdrew at the last moment. A commission staff member, speaking anonymously, said many companies have made progress but declined to share merger specifics, while a source at the Nigeria Insurers Association said the recapitalization process remains ongoing with no merger activity currently on record. Industry sources said most firms are attempting to raise capital independently through rights issues or private placement, with verification exercises being carried out by consultants appointed by the regulator.
Omosehin said he commends the seriousness shown by operators who have engaged investors, improved governance and submitted to verification processes, but stressed that the deadline is regulatory rather than symbolic and that the commission expects every operator to demonstrate readiness, financial soundness and full compliance.
