Economy
Insurance Firms in Nigeria Largely Undercapitalised—Onyema
By Dipo Olowookere
Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr Oscar Onyema, has said most insurance companies licenced to operate in the country are largely undercapitalised.
Mr Onyema made this declaration when he addressed participants at the Insurance Sector Forum held on Tuesday at the Stock Exchange House in Lagos.
During his speech, the NSE chief commended the National Insurance Commission (NAICOM) for directing insurers to increase their minimum paid-up share capital requirement.
According to him, the ongoing recapitalization and consolidation exercise is expected to significantly impact the industry and equally present new opportunities in mergers and acquisitions as well as private equity and public offerings.
He informed the audience that an estimated capital of N200 billion is expected to be injected into the underwriting sector in Nigeria in the post-recapitalization era with a 400 percent increase in the minimum capital required for life, 333 percent for non-life, 360 percent for composite and 200 percent for re-insurance.
Mr Onyema noted that the undercapitalisation of insurance companies in Nigeria has limited their ability to take on big ticket in-country risks, as is often required in the oil & gas, marine and aviation sectors.
“As at Q3 2019, the insurance sector contributed less than one percent to the Gross Domestic Product (GDP) of Nigeria.
“Having a penetration rate of 0.31 percent and an insurance density of 6.2 percent, the Nigerian insurance industry still lags behind its African counterparts, with South Africa having a penetration rate of 14.7 percent, Kenya 2.8 percent, Ghana 1.1 percent and Egypt 0.6 percent,” he said.
He called on players in the space to tap into the various opportunities in the NSE, saying the local bourse provides a platform to support listed corporates to meet their business objectives, whilst also implementing strategic initiatives that have improved investor confidence.
According to him, “This has allowed listed companies to be positioned on the exchange as attractive investment,” noting that, “With the ongoing recapitalization exercise, we will encourage the insurance operators by providing a special window to fast-track the approval process, provided the operators have demonstrated high standards of corporate governance, deep social impact, high regulatory compliance and enhanced returns for their shareholders.”
“Post recapitalisation, we look forward to having our first insurance company listed on the Premium Board of the NSE opportunities,” Mr Onyema stated.
The NSE chief expressed optimism that the recapitalisation policy of the industry regulator would enhance performance, bring about efficiency, innovation and profitability, emphasising that “the industry needs significant support to unleash its growth potential.”
“At the NSE, we see close parallels between this recapitalisation and that of the banking sector in 2005. The immense growth seen in banking industry in large part can be attributed to successful capital raised through the capital market.
“The crucial question before us is unravelling how to replicate similar successes within the insurance space and leverage the platform of the exchange to successfully raise rightsized capital to fuel accelerated growth,” he said.
According to him, the insurance industry presents perhaps the most remarkable investment case of any industry in Nigeria and despite present challenges, it presents numerous opportunities for enhancing the economic fortunes of this country.
“Foreign investors, recognising these opportunities have acted accordingly with the likes of AXA, Prudential, Liberty, Swiss Re, SUNU Group, Saham Group, taking strategic positions in the industry,” he said.
Business Post reports that the Insurance Sector Forum was sponsored by Coronation Merchant Bank and Cordros Capital and had in attendance the acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, represented by Mr Abbas Abdulkadir, Deputy Director/Head Securities & Investment Services; the acting Commissioner of NAICOM, Mr Sunday Thomas, represented by Mr Agboola Pius, Director Policy and Regulation; amongst others.
By Adedapo Adesanya
The National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.
The director-general of the pension regulator, Ms Omolola Oloworaran, speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, said the commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.
She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.
According to her, the commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.
“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.
Ms Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.
She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.
The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.
She said the policy was intended to widen investment opportunities for pension funds without compromising safety.
Using Stanbic IBTC as an example, Ms Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.
“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.
By Aduragbemi Omiyale
Analysts at Meristem Research have predicted that the inflation rate for June 2026 in Nigeria should marginally rise to 15.95 per cent on a year-on-year basis from the 15.93 per cent reported in May 2026.
The National Bureau of Statistics (NBS) is expected to release inflation numbers for last month later today, Wednesday, July 15, 2026.
In its report sighted by Business Post, Meristem Research said it expects inflationary pressures to re-emerge across key economies in the near term, as the re-escalation of the US-Iran conflict has reignited upward pressure on global oil prices.
It disclosed that this marks a sharp reversal from most of June, when the ceasefire between the two countries helped drive oil prices lower, raising expectations of some relief on the inflation front.
With conflicts now flaring up again, oil prices are likely to increase again, and the anticipated easing in energy-driven inflation may not materialise as broadly as earlier envisaged.
“Nonetheless, some relief is likely from the food segment, where robust supply conditions across major producing regions and softening demand should continue to ease food price pressures,” it stated.
The team also explained that it projected a 15.95 per cent inflation rate because of the lingering effects of persistent food price pressures.
“However, we expect core inflation to moderate as the sharp reversal in energy prices begins to filter through to transportation, distribution, and other energy-related costs, easing underlying price pressures.
“On a month-on-month basis, the combined effect of lower petrol prices, a relatively stable Naira, and the gradual pass-through of reduced energy costs across the supply chain should exert further downward pressure on inflation.
“Based on our assessment, food inflation is expected to remain the key swing factor, as seasonal pre-harvest supply constraints are likely to offset some of the gains from lower logistics costs,” it said.
By Adedapo Adesanya
The duo of Central Securities Clearing System (CSCS) Plc and Afriland Properties Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.61 per cent on Tuesday, July 14.
CSCS Plc saw its stock value drop N9.08 to close at N82.40 per share compared with the preceding session’s N91.48 per share, and Afriland Properties Plc slid by 17 Kobo to sell at N15.00 per unit versus N15.70 per unit.
The losses recorded by the two securities pulled back the market capitalisation by N41.64 billion to N2.546 trillion from N2.587 trillion, and cracked the NASD Security Index (NSI) by 69.36 points to 4,242.31 points from 4,311.67 points.
It was observed that the exchange witnessed two price advancers during the session, led by FrieslandCampina Wamco Nigeria Plc, which gained N1.37 to end at N151.37 per share compared with the previous day’s N150.00 per share, and Food Concepts Plc chalked up 5 Kobo to settle at N2.50 per unit versus N2.45 per unit.
The volume of securities traded by market participants surged by 50.7 per cent to 13.7 million units from the previous 9.1 million units, while the value of securities went down by 79.7 per cent to N65.2 million from N320.4 million, and the number of deals crashed by 3.6 per cent to 27 deals from the previous session’s 28 deals.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc, which exchanged 2.3 billion units valued at N6.5 billion, and CSCS Plc with 73.9 million units transacted for N5.2 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
