• Omosehin faces litigation hurdle to reactive process
• Naira depreciation, inflation shrink industry capacity
• At 0.5 per cent, Nigeria among countries with lowest penetration
• Industry behind South Africa, Kenya, Ghana
• Underwriters about 10 times more capitalised in 2007
Nigerian insurance companies may join banks soon to source for fresh funds to inject into the industry as a staunch advocate of the muted recapitalisation, Olusegun Omosehin, assumes office soon as the new Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM). Omosehin, a former Chairman of the Nigerian Insurance Association (NIA), was appointed by President Bola Tinubu at the weekend as a replacement for Sunday Thomas.
Ahead of his resumption, industry experts are already expecting Omosehin to reactivate the insurance recapitilisation, an exercise that was truncated by litigation in 2020. Some operators had teamed up to sue NAICOM demanding the suspension of the exercise, which was expected to nail the curfews of many weak operators.
The recapitalisation programme sought to raise the capital base of the insurance companies and strengthen the underwriting capacity of the operators. Termed Tier-Based Minimum Solvency Capital (TBMSC), the programme was designed for the application of proportionate solvency capital that supports the nature, scale, complexity and risk profile of the business conducted by insurance companies. It divided the industry into three tiers. Tier one was the highly capitalised insurance firm, followed by tier two operators, with tier three insurance firms being the least capitalised.
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