Sovereign Trust Insurance Plc is planning to raise N5 billion through a rights issue as the insurer races to meet the capital requirements set by the Nigerian Insurance Industry Reform Act (NIIRA).
“The Rights Issue is projected to be completed within the first quarter of 2026,” the company said in a disclosure on the Nigerian Exchange on Thursday.
“In line with global best practice, the company has commenced structured engagements with all appointed professional parties, including issuing houses, legal advisers, and auditors, and is currently finalising the necessary regulatory approvals before the formal opening of the offer to shareholders.”
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Nigeria has mandated a capital raise for its insurance industry, with the minimum capital requirement for a non-life insurer at N15 billion, while life assurers stand at N10 billion. The goal is to strengthen the financial solvency of insurers and enable them to underwrite larger risks, thereby reducing reliance on foreign reinsurers and boosting public confidence.
The company said its shareholders, at its annual general meeting held on 25 September 2025, approved a series of resolutions, including mobilising as much as N20 billion in new capital, a move intended to strengthen its financial base, enhance liquidity, and support expanded underwriting in line with the higher capital thresholds set under the NIRA guidelines.
They also approved a dividend payout of 5 kobo per share, reinforcing trust in the company’s disciplined financial strategy and its focus on long-term value.
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Abimbola Oguntunde, the managing director/chief executive officer, stated that the company is strategically working toward securing a top-five position in Nigeria’s insurance industry, guided by metrics such as operational efficiency, premium expansion, and digital leadership.
He encouraged shareholders’ participation in the Rights Issue, underscoring management’s steadfast commitment to innovation, digital transformation, and competitive agility.
Sovereign Trust Insurance has gained 159 percent year-to-date as its shares closed at N2.90 on Wednesday. It has, however, lost 35 percent of its value in the past four weeks.