Recapitalisation Without Corporate Governance To Weaken Underwriting Firms – Experts

Insurance stakeholders have described the ongoing recapitalisation exercise as futile if underwriting firms fail to imbibe corporate governance that will ensure they make judicious use of the money in their kitty post-recapitalisation.

The stakeholders, who spoke at the 2025 Annual Retreat of the Risk, Audit, and Compliance Committee (RAAC) in Abeokuta, Ogun State, over the weekend, noted that the most recapitalised insurer will die once corporate governance is lacking in the day-to-day running of affairs of such an entity.

Speaking on her part, the director general of the Nigerian Insurers Association (NIA), Bola Odukale, while presenting her paper on ‘Insurance Industry Recapitalisation: Strengthening Governance Activities For Maximum Benefits,’ said that while there is a need to build capital resilience, embedding strong governance structures that deliver long-term value is equally critical.

“At the heart of this transformation is recapitalisation, an essential step toward achieving financial solidity, institutional resilience, and global competitiveness. However, let us be clear: capital alone does not guarantee success. The strength of our governance structures will ultimately determine how well we deploy capital, manage risks, and meet our obligations to policyholders and stakeholders,” she pointed out.

While recapitalisation must go together with robust governance, she said, strong boards, efficient internal controls, transparent audit systems, and effective compliance processes are all indispensable components of a resilient institution.

Explaining the role of her association in all these ongoing issues, she noted that NIA’s role extends beyond advocacy; “we serve as facilitators of progress, enablers of industry best practices, and partners in building a trusted financial ecosystem.

Over the years, we have achieved notable milestones that reflect our shared vision for a modern and accountable industry.”

She said that through continuous engagement with the National Insurance Commission (NAICOM), the Federal Ministry of Finance, and other critical stakeholders, the association advocated practical and progressive regulations that support industry growth while ensuring public trust.

Looking ahead, she said, her group remains committed to: facilitating regulatory dialogue to ensure that recapitalisation timelines and modalities remain realistic and inclusive; Promoting capacity-building initiatives in risk, audit, and compliance functions across member companies and encouraging widespread adoption of digital tools for governance, transparency, and performance monitoring.

As professionals in audit, risk, and compliance, she told the gathering that they are the sentinels of organisational discipline and trust, saying, “It is through your vigilance that the promises made by our industry are fulfilled, and it is through your diligence that capital is protected and well utilised. Let us critically evaluate our systems, challenge complacency, and create a roadmap for better outcomes for our institutions, customers, and country.”

For his part, the chairman of RAAC, Olugbenga Akinlalu, said recapitalisation presents both a challenge and an opportunity as it is a clarion call for RAAC members, as assurance professionals, to rise to the occasion, sharpen their tools, and position themselves as catalysts for governance excellence.

Saying the retreat is a platform for deep learning, robust dialogue, strategic networking, and professional renewal, Akinlalu, the group head of Internal Audit at Continental Reinsurance, added that, “as we stand on the brink of a redefined insurance landscape, the question before us is simple but profound: Are we prepared to be relevant, impactful, and governance-driven in the post-recapitalisation era?”

Moreover, the managing director/CEO of Cornerstone Insurance Plc, Stephen Alangbo, said that the breakdown of corporate governance led to the closure of some big insurance brands in the past, especially after the 2007 recapitalisation exercise, when companies raised so much money but didn’t know what to do with it.

Urging underwriters not to tread the same path in the ongoing exercise, he urged them to adopt corporate governance to make the adopting insurer attractive for investments from local and foreign investors.

Similarly, the director of Supervision at the National Insurance Commission (NAICOM), Oluwatoyin Charles, said the commission is positioning the industry to contribute more meaningfully to national economic development.

“Recapitalisation is just one aspect of the NIIRA Act. With sufficient capital, we can ensure financial stability and attract foreign investment. Strong corporate governance is essential to achieving these goals,” she said.

Charles further noted that the NIIRA Act includes new provisions on corporate governance. “Amendments and reviews are currently underway. Regarding mergers and acquisitions, we are developing clear implementation guidelines under the NIIRA Act 2025. A roadmap with timelines will be introduced to guide companies on necessary submissions and strategic planning,” she explained.