New capitalization requirements for Nigerian insurers and reinsurers
Under the new provisions, Nigerian insurers and reinsurers are required to hold respectively 50% and 60% of the minimum capital required by 31 December 2020.
To date, only 20 companies out of more than 50 operating in the market have obtained the approval of their shareholders to recapitalize their business. It should be noted that the capital to be injected depends on the financial value of the companies in question. The amount can vary between 5.2 million USD and 25.7 million USD.
Eventually, that is by 30 September 2021, all companies in the market will have to raise 100 billion NGN (257.7 million USD) to comply with the legal requirements. Several companies will opt for mergers and acquisitions while others are considering selling assets.