At the ongoing 2023 National Insurance Conference in Abuja, Mr. Tony O. Elumelu, Chairman of Heirs Holdings Group, Heirs Insurance Group, and UBA Group, as well as the Founder of The Tony Elumelu Foundation, called on the National Insurance Commission (NAICOM) to increase the capital base of the insurance industry to align with current market realities and improve its ability to compete in the dynamic market environment.

In his proposal, Mr. Elumelu recommended a significant hike in capital requirements: N20 billion for life insurance, N30 billion for general insurance, and N50 billion for composite insurance operations. He also suggested increasing the capital base for insurance brokers to N1 billion. According to Mr. Elumelu, this recapitalization would empower the industry to better handle complex insurance transactions and expand beyond Nigeria, thereby enhancing its influence across Africa.

Mr. Elumelu further emphasized the need to review the current separation between life and non-life insurance authorizations and licenses. He argued that regulatory focus should shift from less impactful areas, such as approving advertisements, to more critical regulatory actions that would stimulate compliance and operational effectiveness.

Highlighting the inadequacy of the current capital requirements—set at N8 billion for life insurance and N10 billion for general insurance—he pointed out that, due to naira devaluation, these amounts now equate to approximately $8 million and $10 million respectively, which he deemed insufficient for Nigeria’s large economy.

“How can an industry intended to mitigate risks and support economic growth have such low capital requirements?” Mr. Elumelu questioned, clarifying that his suggestion to increase the capital base was not intended as a barrier to entry but as a means to strengthen the sector’s financial muscle. He emphasized that the goal was to equip the industry to take on more complex transactions and extend its reach beyond Nigeria into the wider African market.

In addition to recapitalization, Mr. Elumelu proposed that all insurers should contribute 0.5% of their total revenues for five years to fund initiatives aimed at raising industry awareness. He urged the Nigerian Insurers Association (NIA) to take the lead in managing this policy.

His recommendations are poised to spark discussions within the industry, as they advocate for a stronger, more competitive insurance sector capable of supporting Nigeria’s economic growth while expanding its influence across the African continent.