Feature/OPED
What to Expect from NAICOM’s New Capital Requirements for Insurance Industry
By Ada Ufomadu
The National Insurance Commission (NAICOM) recently increased the minimum paid up share capital requirements for insurance and reinsurance companies by a minimum of 100% across all segments. Life insurers are expected to raise minimum paid up capital from N2 billion to N8 billion; general underwriters from N3 billion to N10 billion; while composite and reinsurance companies have new minimum paid up share capital requirements of N18 billion and N20 billion, up from N5 billion and N10 billion respectively. The regulator exempted takaful and micro insurance companies from the recapitalisation exercise. According to NAICOM, the new regulation takes effect immediately (May 20, 2019) for new applications while existing operators have until June 30, 2020 to comply.
NAICOM’s new capital requirements are much stricter than the earlier proposed Tier Based Minimum Solvency Capital (TBMSC) which was cancelled in October 2018, a few months after its announcement in July 2018. The major reason for the cancellation was the short timeframe within which operators were required to comply as well as the tier-based model which discriminated smaller insurance companies. Although these have been addressed by the new directive, capital requirements across board are now much higher. This is similar to what the industry witnessed in its last recapitalisation between 2005 and 2007 when capital requirements for life companies increased from N150 million to N2 billion, general insurers from N200 million to N3 billion, composite underwriters from N350 million to N5 billion and reinsurers from N350 million to N10 billion.
The 2005/2007 recapitalisation saw a significant decline of the number of players from 103 direct insurers and four reinsurers operating as at 31 December 2005 with total core capital of N30 billion to 49 recertified firms (7 life, 23 general, 18 composite and 1 reinsurer) with a total capital base of N150 billion as at 31 December 2007. The consolidation involved major mergers comprising up to five insurance companies to form new companies with stronger capital. To ease the financial burden of the recapitalisation exercise, NAICOM obtained palliatives and concessions from other related authorities such as the Corporate Affairs Commission (CAC), Securities Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) on application processing fees on M&As and other associated activities. However, it took the Industry up to two years to adopt the new capital standards.
Although the recapitalisation exercise in 2005/2007 strengthened the Insurance Industry’s underwriting capacity, there were major notable hitches during the process. Due to uncertainties that surrounded identities of the recertified insurance companies, brokers withheld premiums paid by clients as against transferring same to the underwriting firms. The resultant effect was a decline in premiums available for investments. A similar trend was observed in 2018 following the introduction of the TBMSC where a number of players were adversely impacted by large corporates (particularly in the oil & gas sector) demanding immediate payment of outstanding claims due to uncertainties on the insurers that qualified as Tier 1 insurance companies.
Going by available 2018 financials of 12 insurance companies, only WAPIC Insurance Plc meets the new minimum capital requirements with its current structure. However, some insurers such as Linkage Assurance Plc and NEM Insurance Plc have strong accumulated retained earnings that can potentially be converted to share capital through bonus issuances. On the other hand, a number of insurers meet the minimum paid up share capital, but have huge accumulated retained losses that have substantially or completely eroded capital. Therefore, substance over form, these companies do not have sufficient capital. We believe that this is worthy of consideration by the regulator.
General Insurers
| FYE2018 | FYE 2018 | |||
| Paid up Share
Capital ‘000 |
Shareholders’
Funds ‘000 |
New Minimum
Requirement |
||
| 1. | Consolidated Hallmark Insurance Plc | N4,220,264 | N6,058,041 | N10,000,000 |
| 2. | Law, Union & Rock Insurance Plc | N3,625,238 | N6,372,504 | N10,000,000 |
| 3. | Linkage Assurance Plc | N4,729,043 | N17,920,487 | N10,000,000 |
| 4. | NEM Insurance Plc | N2,912,802 | N12,427,157 | N10,000,000 |
| 5. | Regency Alliance Insurance Plc | N4,545,617 | N5,050,801 | N10,000,000 |
| 6. | Sovereign Trust Insurance Plc | N4,287,255 | N5,820,355 | N10,000,000 |
| 7. | WAPIC Insurance Plc | N12,886,352 | N14,255,618 | N10,000,000 |
| 8. | SUNU Assurances Nigeria Plc | N8,023,465 | N3,757,942 | N10,000,000 |
| 9. | Prestige Assurance Plc | N3,018,823 | N8,101,086 | N10,000,000 |
Composite Insurers
| FYE 2018 | FYE 2018 | ||||
| Paid up Share
Capital ‘000 |
Shareholders’
Funds ‘000 |
New Minimum
Requirement |
|||
| 1.
2. |
AIICO Insurance Plc | N6,289,491 | N14,347,313 | N18,000,000 | |
| AXA Mansard Insurance Plc
Reinsurance Companies |
N9,693,453 | N16,767,833 | N18,000,000 | ||
| FYE 2018 | FYE 2018 | ||||
| Paid up Share Shareholders’ New Minimum
Capital ‘000 Funds ‘000 Requirement |
|||||
| 1. | Continental Reinsurance Plc N9,101,823 N19,266,586 N 20,000,000 | ||||
Overall, a significant percentage of underwriters would need to raise capital in the short term, leveraging shareholders support, brand equity and internally generated revenues. We recognise that compared to the 2005/2007 recapitalisation where there was a booming capital market and banks were allowed to invest or outrightly acquire controlling interests in insurance companies, underwriters now have limited avenues to raise capital.
Therefore, recapitalisation will be largely achieved through mergers & acquisitions, foreign direct investments (FDI), private placements and rights issues. We remain cautiously optimistic about foreign direct investments, given persistent weak investor sentiments on account of political and economic uncertainties.
Although NAICOM’s intention is to consolidate the highly fragmented industry through M&As, many insurance companies would need to raise additional capital as a prerequisite for a probable M&A. This would ultimately improve their position in merger negotiations and possibly reduce the number of insurance companies that would be required in a merger.
We expect a successful recapitalisation to redistribute market share among players. The Insurance industry is presently dominated by few players with top 5 operators accounting for 43% of gross premium income (GPI), 42% of total assets and 61% of profits. Overall, we believe that a consolidation will bring about the much-needed stronger and better capitalised industry, equipped to improve insurance penetration in Nigeria through technology and underwriting capacity.
This article was written by Ada Ufomadu, a Senior Financial Institutions Analyst at Agusto & Co.
Feature/OPED
Second Home, Second Mother: Life Inside an Early Years Classroom
By Ohore Emmanuel Ufuoma
The Early Years classrooms have effectively become surrogate homes where educators now tie shoelaces, calm separation anxiety, supervise naps, enforce discipline, and provide comfort after minor injuries, which ought to be duties that should be performed by parents.
The extended work hours from 8 a.m. to 6 p.m. for six days a week, economic realities, and the proliferation of all-day, weekend-inclusive early learning programs have repositioned schools as the primary environment for early childhood development.
For a typical four-year-old, 9.5 hours in school account for about 75% of waking weekday time. With Saturday sessions added, the home is reduced to a space for meals, sleep, and brief routines.
The mandate of Early Years teachers has expanded far beyond academics. Current practice requires them to handle physical care, emotional regulation, and behavioural guidance concurrently.
Daily responsibilities include toileting assistance, feeding, conflict mediation, fatigue monitoring, and maintaining individual routines for 15–20 pupils.
The parent-child dynamic shifts when parents deliberately delegate care of the child, and even punishment, to educators. While parents set apart evenings and weekends for practical tasks, like food, homework, and bathing.
Psychologists term it “contact without connection.” Although parents are physically present, time is divided and focused on tasks.
Children are more obedient and organised in class than they are at home, according to teachers. Parents describe the contrary. The pattern shows an expected result: the parent becomes the outlet for exhaustion, while the educator becomes the authority figure.
The labour market triggered the transfer of responsibilities between parents and educators.
Dual-income households are now the norm in major cities, and flexible work remains limited outside tech and finance.
Child caregiver costs compound the issue. Full-time caregiver care often costs almost half of a salary. Parents opt for schools with extended hours in order to kill two birds with one stone.
For educational centres, extended-day programs create parent-like responsibilities, and staffing, training, and compensation should reflect that. In leading centres, professional development in attachment theory and stress management is becoming standard.
For parents, the emphasis should be on quality rather than quantity.
Policymakers are beginning to prioritise employment rules that permit parental presence during early childhood and accessible, flexible daycare. Strong early attachment is associated with higher scholastic success and fewer behavioural problems in later life.
The Early Years teacher and the parents have not replaced each other. Both parties are only responding to a system that demands more hours in the workplace with fewer hours at home.
There has been a paradigm shift in the upbringing of children. The teachers now perform functions once meant for the family unit.
Intentional parenting inside the small windows has been left in the hands of caregivers.
Instead of the classroom remaining a place of learning, it has become the only home children know.
Ohore Emmanuel Ufuoma is an MBA student at Tokat Gaziosmanpaşa University, Turkey
Feature/OPED
Preparing Bank Security Operations for Scale, Change, and Long-Term Resilience
By Quintin Roberts
When banks and financial institutions upgrade their physical security systems, they are making decisions that will affect operations for years. Branch formats are changing, cyber risks are increasing, and security teams are being asked to support more sites, more data, and more business functions. The challenge is keeping pace with change in a way that holds up over time.
A modern physical security strategy needs to go beyond protection. It needs to give teams a clearer view across branches, support consistent governance, and provide the flexibility to adapt as technology and operational needs change. The following considerations focus on foundational choices that help banks build security operations that are resilient and can grow with the business.
Choose open architecture to preserve long-term flexibility
Banks and financial institutions often manage a mix of legacy systems, newer technologies, and location-specific requirements. A proprietary system can limit scalability, options for devices, and which systems can connect across the organisation. Over time, this can increase costs and make it harder to modernise without replacing infrastructure that still has value.
Open architecture gives decision-makers more choice and preserves flexibility. It allows financial institutions to select the cameras, access control devices, sensors, analytics, and other technologies that best fit each location and adapt them as their needs change.
This allows teams to modernise in phases. For example, an institution may standardise video management across many sites while keeping existing cameras in place, then replace hardware over time.
Decide how to deploy your security system
Some banks want to keep core systems on-premises at major sites. Others prefer cloud-managed services for smaller branches, remote locations, or new sites that need faster deployment and less local infrastructure. Many need a mix of both. Deployment flexibility gives them the freedom to choose where systems run, how data is stored, and how services are managed.
This is especially important for institutions with different regulatory requirements, bandwidth limitations, and internal IT policies. A flexible deployment model helps banks modernise at their own pace while maintaining control over performance, cybersecurity, compliance, and cost.
Unify operations to improve visibility across branches
Managing video surveillance, access control, intrusion, and other systems separately slows down response time and makes investigations harder. Operators may need to sign into different applications, search through data in different ways, and manually piece together what happened. Across hundreds of branches, these inefficiencies can add up quickly.
A unified security platform gives teams one operating picture across systems and sites. A local team can respond faster to an incident at a single location, while a central security operations centre can monitor trends, support remote sites, and apply consistent procedures across the network.
A unified system that creates a shared context makes incorporating analytics or AI-driven capabilities more effective, further accelerating searches, identifying patterns, and reducing overall investigation time.
Put cybersecurity and governance at the forefront
Physical security systems are connected to the broader IT environment. Devices all need to be managed as part of the bank’s cyber risk profile. If systems are outdated or inconsistently configured across branches, they can create unnecessary exposure and make long-term management harder. When cybersecurity and governance are a foundational part of the system, encryption, authentication, user permissions, system updates, audit trails, retention policies, and privacy controls are applied consistently across locations.
A centralised approach makes this consistency sustainable. It provides accountability for banks, helping teams keep track of who accessed which systems, who changed permissions, how long video is retained, and how evidence is shared. This is important for meeting regulatory expectations and adapting security operations over time. Further, consistent policies make organisational risk management more effective by standardising how risk is handled across the organisation, adding to future resilience.
Automate workflows for better risk mitigation and investigations
Investigations often involve information from several systems and locations. A suspicious ATM transaction may need to be matched with video, or an access event may need to be reviewed alongside intrusion activity. If that information sits in separate systems, investigations take longer and are harder to document.
Unified systems connect the relevant context across video, access control, license plate recognition, and other systems. This supports faster investigations and helps teams share evidence internally or with law enforcement while maintaining the chain of custody.
Improve business operations using physical security data
Physical security systems collect valuable operational data every day, from occupancy levels to device health. A unified platform can turn this data into useful insights, helping security teams identify recurring issues and improve resource planning. Other departments can use the same information to improve customer experience, branch operations, and facility management.
For example, occupancy and queue data help banks understand when branches are busiest. Device health monitoring enables teams to identify maintenance needs before systems fail. And with centralised reporting, leadership can see patterns across the full branch network rather than relying on isolated site-level reports.
Making the right choices for the long term
As banks modernise their physical security infrastructure, long-term resilience will depend on foundational choices. Strategies based on open architecture, deployment flexibility, unification, cybersecurity, governance, and data all help financial institutions build systems that can adapt well into the future.
Quintin Roberts is the Regional Sales Manager for Genetec Africa
Feature/OPED
Strengthening Partnerships Through Dialogue: Okomu’s Engagement with Extension 1 Communities
Corporate organisations have been described as an Open Social System wherein the input of the organisations comes from the environment and the output goes back to the environment. In this equation, therefore, proactive and socially responsible organisations must constantly interface with its environment where the surrounding communities are significant stakeholders.
In line with this thought, Okomu Oil Palm Company constantly engages with all its neighbouring communities on a quarterly basis to discuss issues of mutual concern and to resolve any issues that may degenerate into grievances. Through regular stakeholder meetings, the company continues to foster open communication, address concerns, and strengthen relationships with communities within the company’s concessions. Recently, the company engaged communities around its Extension 1 plantation, including Okomu village, Udo, Madagbayo, Safarogbo, Gbelebu, Inikorogha, and Ofunama, Gbole-Uba.
These engagement meetings serve as an important platform for community leaders, youth representatives, women’s groups, and company representatives to discuss matters affecting the well-being and development of the communities. The sessions reflect Okomu’s commitment to maintaining a transparent and mutually beneficial relationship with its host communities.
During the meetings, representatives from the various communities highlighted issues of importance to residents, including infrastructure needs, educational support, employment opportunities, environmental concerns, and community welfare. Company representatives listened attentively to these concerns, provided updates on ongoing initiatives, and outlined measures being taken to address identified challenges.
A key feature of the engagements was the emphasis on collaboration. Community leaders acknowledged the importance of maintaining open channels of communication and working closely with the company to achieve shared development goals. Discussions focused not only on challenges but also on opportunities for greater partnership and community participation in development initiatives.
One of the key highlights of the meetings was the discussion surrounding Okomu’s collaboration with the Foundation for Partnership Initiatives in the Niger Delta (PIND) an NGO that is focused on human capital development Community members were briefed again on the objectives of the partnership, and the areas of PIND intervention and its potential to create meaningful opportunities for economic empowerment, skills development, and improved livelihoods within host communities.
Health, Safety and Environment (HSE) awareness sessions were also conducted during the meetings. Community members received valuable information on safety practices, environmental stewardship, and measures aimed at promoting healthier and safer communities. The sessions encouraged residents to play an active role in maintaining a safe environment while supporting sustainable practices within their communities.
The meetings also provided an opportunity for the company to share updates on ongoing projects and interventions designed to improve the quality of life within the host communities. Through these engagements, Okomu reaffirmed its dedication to responsible corporate citizenship and its long-standing commitment to supporting the growth and development of neighbouring communities.
As the discussions concluded, participants expressed appreciation for the opportunity to engage directly with company representatives and contribute to conversations that impact their communities. The meetings reinforced the value of dialogue, mutual respect, and partnership in building stronger and more resilient communities.
Okomu remains committed to sustaining these engagements and working alongside its neighbouring communities to create lasting social and economic value. By listening, responding, and collaborating, the company continues to strengthen the bonds that support shared progress and sustainable development across the Extension 1 communities.
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