Insurance Stocks Surge 10% Following New Industry Recapitalisation Law.
Insurance stocks on the Nigerian Exchange Limited (NGX) soared by 10% on Tuesday, just 24 hours after President Bola Tinubu signed the Nigerian Insurance Industry Reform Act (NIIRA) 2025 into law. The legislation, aimed at revitalising the insurance sector, has sparked a wave of investor optimism, driving significant gains in share prices across the market.
The NIIRA 2025 consolidates and replaces outdated insurance laws, establishing a modern legal framework to enhance transparency, innovation, and global competitiveness. The Act introduces stringent capital requirements, mandating life insurance firms to increase their capital base from N2 billion to N10 billion, non-life insurers from N3 billion to N15 billion, and reinsurance companies from N10 billion to N35 billion—a 500% increase in some cases. These measures are designed to ensure financial stability and attract foreign investment, particularly in high-value sectors such as oil, gas, maritime, and aviation.
Market data revealed that 15 of the 17 listed insurance stocks recorded gains, with companies like AXA Mansard, Mutual Benefits, and NEM Insurance leading the charge with 10% increases. Only two stocks remained unchanged, underscoring the broad market enthusiasm for the reform. Trading volumes also surged, rising by 299% to 1.88 billion shares compared to the previous session’s 471 million, according to NGX reports.
Bayo Onanuga, special adviser to President Tinubu, stated that the Act aligns with the government’s ambition to build a $1 trillion economy by 2030. He highlighted that the National Insurance Commission (NAICOM) is tasked with enforcing the new regulations to boost insurance penetration and unlock the sector’s potential. The law also promotes digitisation and enforces a zero-tolerance policy on delays in claims settlements, further boosting consumer confidence.
Industry leaders have hailed the legislation as transformative. Tokunbo Abiru, senator and chair of the Senate Committee on Banking, Insurance, and Other Financial Institutions, described it as a pivotal step towards aligning Nigeria’s insurance sector with global best practices. He noted that the Act would enhance governance, protect policyholders, and deepen financial inclusion. Similarly, Prince Babatunde Oguntade, president of the Nigerian Council of Registered Insurance Brokers, predicted that the reforms would streamline operations, ensure ethical practices, and increase the industry’s contribution to Nigeria’s GDP.
Analysts anticipate a wave of mergers and acquisitions as smaller firms strive to meet the new capital thresholds within the 12-month compliance period set by the National Assembly. NAICOM is expected to provide further guidance on implementation timelines and qualifying capital, which could shape the sector’s trajectory in the coming months.
The reform is seen as a cornerstone of President Tinubu’s Renewed Hope Agenda, complementing other economic initiatives like banking sector recapitalisation and the 2025 Tax Act. With investor confidence on the rise, Nigeria’s insurance industry appears poised to emerge as a leading hub in Africa, driving economic growth and financial stability.