At least 20 insurance companies have secured the approval of their respective shareholders to proceed with their recapitalisation plans.
The amount of capital to be increased varies with each company depending on its current financial worth, reported Leadership. While some require just NGN2bn ($5.2m) to recapitalise, others need between NGN5bn and NGN10bn, especially composite insurers.
The concerned insurers are expected to raise a cumulative NGN100bn in fresh capital to meet new minimum capital requirements.
They include Linkage Assurance, Consolidated Hallmark Insurance (CHI), Mutual Benefits Assurance, NEM Insurance, Leadway Assurance, Sunu Assurances, Anchor Insurance, Cornerstone Insurance and Wapic Insurance. Others are African Alliance Insurance, Law Union & Rock Insurance, FBN Insurance, AIICO Insurance, AXA Mansard Insurance, Old Mutual Assurance, Sovereign Trust Insurance (STI), Unitrust Insurance, LASACO Assurance, Royal Exchange, Great Nigeria Insurance (GNI) and Guinea Insurance.
Insurers must meet at least 50%, and reinsurers have to reach at least 60% of the new minimum capital requirement by 31 December 2020. They have to meet the full minimum requirements by 30 September 2021.
To comply with requirements, a few insurers are considering mergers and acquisitions, some are selling off their assets to make up the capital shortfall, even as others are going public to raise the necessary funds. There are more than 50 insurers operating in Nigeria.