NIGERIA Trends and Developments Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi and Toluwalase Oliver-Jude, Jackson, Etti & Edu
Insurance sector recapitalisation: 2026 implementation phase
gered one of the largest capital mobilisation efforts in Nigeria’s financial history, with over NGN4 trillion raised across the banking sector. Market response and structural realignment The recapitalisation exercise has significantly reshaped the structure of the banking industry, with institutions adopting varied strategies depending on their size, ownership structure and market positioning. Tier 1 : international banks Leading institutions such as Access Holdings, Zenith Bank, First HoldCo, GTCO, UBA, Fidelity Bank and FCMB Group not only met but exceeded the NGN500 billion capital requirement. These banks now account for a dominant share of industry assets and play a central role in credit allocation, foreign exchange transactions and corporate financing. Their strong capital positions reflect deep investor confidence and strong access to both domestic and international capital markets. Tier 2 : national banks Mid-tier banks such as Ecobank Nigeria, Stanbic IBTC, Wema Bank and Standard Chartered Nigeria met capital requirements through a combination of rights issues, private placements and shareholder or parent company support. This segment remains highly competitive, with institutions increasingly focusing on retail banking, SME financing and specialised financial services. Tier 3 : regional and non - interest banks Smaller banks largely achieved compliance through mergers, acquisitions and strategic restructuring. A notable example is the consolidation involving Provi - dus Bank and Unity Bank, reflecting the broader industry trend toward consolidation. Non-interest banks such as Jaiz Bank, TAJ Bank, Lotus Bank and Alternative Bank also met regulatory requirements, signalling steady growth in Islamic finance and ethi - cal banking in Nigeria. A small number of institutions remain under regula - tory supervision, with the CBN adopting a stability- focused approach to ensure depositor protection while allowing time for restructuring.
The insurance sector has also undergone significant reform following the introduction of the Nigerian Insur - ance Industry Reform Act (NIIRA) 2025, which was signed into law on 31 July 2025 and represents the most comprehensive overhaul of insurance regulation in decades. It introduces a unified legal framework and significantly increases minimum capital require - ments across insurance categories. The new capital thresholds are as follows: • life insurance companies: NGN10 billion; • non-life insurance companies: NGN15 billion; • composite insurance companies: NGN25 billion; and • reinsurance companies: NGN35 billion. Operators are required to comply within 12 months, ending 30 July 2026, with active implementation already underway as of April 2026. Market response in the insurance sector Insurance companies have responded to the new requirements through a combination of capital rais - ing, restructuring and strategic repositioning. Sev - eral insurers are currently accessing the Nigerian Exchange (NGX) to raise capital, including Guinea Insurance, Linkage Assurance, Lasaco Assurance, SUNU Assurance, Sovereign Trust Insurance and Universal Insurance. In addition to capital raising, some companies are reviewing their business models, including the possi - bility of exiting under-performing segments or restruc - turing into specialised entities to meet regulatory thresholds more efficiently. The regulator, NAICOM, has maintained a firm stance on compliance and has reiterated that deadlines remain fixed, with no indica - tion of extension. Implications for the insurance industry The recapitalisation exercise is expected to signifi - cantly reshape the insurance industry in several ways. Smaller insurers unable to independently meet the new thresholds are likely to consolidate, producing
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