Minority shareholders of insurance companies are asking the board and management of insurers about their readiness for recapitalisation.
The questions emerge as the Nigeria Insurance Industry Reform Bill 2024, currently being processed, proposes that the minimum capital requirement of life insurance companies be hiked to NGN15bn ($9.15m) from the current NGN2bn and that of non-life insurers be raised to NGN25bn from the current NGN3bn. It also proposes that reinsurance companies increase their required minimum capital to NGN45bn from the current NGN10bn
According to a report in the newspaper Punch, the chairman Emeritus of Independent Shareholders Association Of Nigeria (ISAN), Mr Sunny Nwosu, said, “You must start to plan on how to raise your capital, because it must come given what I have read concerning the new proposed bill.”
Mr Nwosu also warned that it might not be easy for insurers because banks are also seeking new funds.
There have been efforts made in 2018 and 2021 at increasing the capital of insurers but resistance was evident. The last successful recapitalisation in the insurance sector was in 2007.