About ₦300 billion raised by Nigerian insurance companies during the industry’s recapitalisation exercise remains held in escrow accounts at the Central Bank of Nigeria (CBN), as the apex bank continues to verify the sources of the funds.
The delay has left 24 insurance and reinsurance companies waiting to access capital they intend to use to strengthen their operations and improve financial performance.
According to the Nigerian Insurers Association (NIA), the National Insurance Commission (NAICOM) has already instructed the CBN to release the funds, but the money will only be returned to the companies’ original accounts after the necessary verification procedures are completed.
The checks are intended to establish that the funds came from legitimate sources and comply with applicable financial regulations.
The recapitalisation exercise, which ended on July 31, 2026, required insurance companies to meet higher minimum capital requirements under the Nigerian Insurance Industry Reform Act 2025.
Of the 50 insurance and reinsurance companies that met the recapitalisation requirements, 24 raised fresh capital, while the remaining 26 already had sufficient capital to meet the new thresholds.
The exercise increased the industry’s total capital base to approximately ₦1.079 trillion, up from about ₦700 billion before the recapitalisation.
NIA Chairman Ebelechukwu Nwachukwu said the affected companies were working to meet the CBN’s requirements, expressing expectations that the funds would be released before the end of October.
The delay has also affected the companies’ plans to deploy the new capital to expand underwriting capacity, retain more risks locally and improve returns for shareholders.
Meanwhile, NAICOM is preparing the industry for a transition to a Risk-Based Capital framework, which will align insurers’ capital requirements more closely with the risks they undertake.
The regulator has appointed professional services firm Ernst & Young to support the transition, with an exposure draft of the framework expected to be shared with industry operators for review.
The release of the escrow funds remains an important next step following the recapitalisation exercise, as insurers seek to turn their strengthened capital positions into greater capacity to provide coverage and meet claims obligations.
