During the National Insurance Conference 2023, organized by the National Insurance Commission (NAICOM) and themed “Redefining Safety: Insurance Solutions For Public Buildings and Building Under Construction,” Mr. Tony Elumelu, the Chairman of Heirs Insurance Group, put forth a proposal to increase the capital base for insurance firms in Nigeria. Specifically, he recommended setting the capital base at N30 billion for general insurance companies and N20 billion for those offering group life insurance.
Elumelu emphasized the need for a significant increase in the capital base of insurance companies, stating that the current requirements of N8 billion for life insurance and N10 billion for general insurance are insufficient.
In addition to this proposal, Elumelu urged NAICOM to eliminate the distinction in insurance authorizations and licenses between life and non-life insurance companies. He also recommended a recapitalization of N1 billion for insurance brokers, considering the currency’s devaluation, which translates to USD 8 million to USD 10 million capital requirements for an insurance company in Africa’s largest economy.
Furthermore, Elumelu called upon NAICOM to shift its focus towards substantive matters shaping the insurance sector and cease approving advertisements. He also suggested that the industry allocate 0.5% of total revenue for a mandatory five-year initiative to raise awareness within the industry.
If implemented, these proposed changes could substantially impact Nigeria’s insurance industry, potentially increasing its stability and ability to meet the evolving needs of policyholders.
