Large cap insurers mop up businesses on recapitalisation jitters

Uncertainty around recapitalisation is prompting a redistribution of insurance business, as brokers clients are gravitating toward large-cap insurers with stronger balance sheets to reduce counterparty risk.

Industry sources say this has heightened since the current year renewal period as insurers wrestle to meet 31 July 2026 deadline given to insurance companies to recapitalise.

Large cap insurers are gaining business as clients move away from smaller, uncertain players, says one of the Lagos based insurance brokers.

According to the broker, big insurance are taking more of the businesses because one cannot afford to take a careless risks.

Insurance Companies also called underwriters have been given until 30th July 2026 to increase their minimum capital requirement to N15 billion for general business firm, N10 billion for life business firms, N25 billion for composite business firms, while reinsurers were N35 billion.

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Toba Olusesi, an insurance broker had said ‘We are being careful not to place business with a company that will not survive after July 2026, so we are curious about their plans and strategies to remain in business.”

According to him, his brokerage firm has asked all the underwriting partners to submit their recapitalisation plans before they can be considered for any new placement in 2026.

“We are becoming more demanding and selective because we want to know how they will meet the regulatory requirement, he said.

Chijioke Nwafor, managing director, Crystal and Diamond Insurance Brokers Ltd responding to questions on what brokers are doing in respect of the recapitalisation and their relationship with underwriters, said:

“As a broker, your primary duty is to protect the interests of your client, and if an underwriter’s recapitalisation plan is not satisfactory, you simply move the business elsewhere.”

He emphasised further that, “It is only reasonable for brokers to evaluate the recapitalisation plans of underwriters before placing business.”

“If you are not satisfied with the recapitalisation plan, you move your business elsewhere. Simple, you do not want to find yourself queuing up with creditors when the company is eventually wound up. That is not necessary.

According to him, there are some underwriters we already know quite well and are confident that they have exceeded expectations. However, for those you are not too sure about, it is better to ensure they have a very solid plan in place before placing any business or renewal with them. That is simply the truth.

Modestus Anaesoronye is a leading Nigerian financial journalist with over two decades of experience reporting on the insurance and pension sectors across Nigeria and West Africa. He has held key editorial positions at major national media outlets, including The Comet, The Nation, and Financial Standard, and currently serves as a Senior Financial Analyst at BusinessDay Media Ltd.

A widely travelled reporter, he has covered industry developments in more than 14 countries across Africa and Asia.

Anaesoronye is a multiple award-winning journalist, honoured several times as Insurance Journalist of the Year and Pension Journalist of the Year by recognised industry bodies, including PensionScope and the Pension Fund Operators Association of Nigeria (PenOp), among others.

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