The National Insurance Commission is set to significantly raise the minimum capital requirement for microinsurance firms to N3 billion, marking a major shift in Nigeria’s push to strengthen financial inclusion and industry stability.

The proposed increase, contained in the Nigeria Insurance Industry Reform Act 2025, replaces the existing tiered structure of N40 million for unit operators, N100 million for state operators and N600 million for national firms. The new threshold is expected to apply uniformly across all microinsurance providers.

 

The move aligns with broader reforms in the insurance sector, where capital requirements for life insurance firms have been set at N10 billion, general insurance at N15 billion and reinsurers at N35 billion. While the commission had not initially specified figures for microinsurance, indications suggest the new N3 billion benchmark could take effect immediately.

The reform is designed to strengthen the financial capacity of microinsurance firms, enabling them to scale operations and provide more reliable coverage to low-income individuals, micro-entrepreneurs and underserved communities.

 

Microinsurance products are typically structured as simple, low-cost policies with easy-to-understand terms, making them accessible to informal sector players and small business owners. Distribution channels include agents, cooperative societies, NGOs, faith-based organisations and digital platforms such as mobile payment systems.

By introducing a higher capital base, regulators aim to improve trust, ensure claims-paying ability and position operators for nationwide reach. However, the new requirement may also trigger consolidation in the sector, as smaller firms could struggle to meet the threshold.

The Act also emphasises digitisation as a key driver of growth, encouraging the use of web aggregators and digital tools to expand access and reduce distribution costs. It further promotes collaboration between stakeholders, including the Central Bank of Nigeria, to develop affordable and inclusive insurance products.

 

For MSMEs, the reform could reshape access to risk protection. Stronger, better-capitalised insurers may offer more reliable coverage for small businesses, particularly in areas such as health, agriculture and asset protection. At the same time, reduced competition from smaller players could affect product diversity and pricing in the short term.

Licensed operators in the space include Goxi Micro Insurance Limited, Cassava Micro Insurance, CHI MicroInsurance Limited, Creditstar Microinsurance, Prudent Choice Microinsurance and Lifeguard Microinsurance, among others.

 

As implementation begins, attention will shift to how operators adapt to the new requirements and whether the reform ultimately delivers deeper insurance penetration across Nigeria’s informal and underserved markets.

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