Recapitalisation: Five insurers pursue N75bn fresh funding

Five insurance companies have indicated that they would be raising about N75bn additional capital from the market as part of efforts to meet the new minimum capital requirement, The PUNCH can report.

According to their corporate filings on the Nigerian Exchange Limited, most have received board-level approval and are now seeking the approval of shareholders to go ahead with the capital-raising efforts.

These underwriters include SUNU Assurances, Sovereign Trust Insurance, Linkage Assurance, Guinea Insurance and Veritas Kapital Insurance.

To achieve their aim, they plan rights issues, public offers and private capital placement, while the regulator, the National Insurance Commission, has also revealed that mergers have been approved by some boards.

The PUNCH reports that the capital-raising efforts come on the heels of the passage of the Nigerian Insurance Industry Reform Act 2025, which stipulates higher Minimum Capital Requirements for players in the insurance sector. According to NIIRA 2025, the minimum capital base for non-life insurers has been raised to N15bn, while the capital requirement for life insurance firms is now at least N10bn.

Reinsurance companies will increase their capital threshold to N35bn.

In the past week, Guinea Insurance informed the investing public that it would be holding an Extraordinary General Meeting to seek shareholders’ approval to raise up to N15bn in additional capital for the company.

Part of the special resolutions that the shareholders would be voting on include, “That the company’s minimum issued share capital be and is hereby increased from N4,000,000,000 (four billion naira), made up of 8,000,000,000 (eight billion) ordinary shares of N0.50 kobo each, to N19,000,000,000 (nineteen billion naira), made up of 38,000,000,000 (thirty-eight billion) ordinary shares of 50 kobo each.

“That in order to comply with statutory capital requirements, strengthen the company’s financial base and support its strategic growth objectives, the Board of Directors be and are hereby authorised to raise additional equity capital of up to N15,000,000,000 (fifteen billion naira) by way of Rights Issue and Private Placement, on such terms, pricing, allotment structure and timetable as the Board of Directors may determine in the best interest of the company.”

Sovereign Trust Insurance has already received shareholders’ nod to raise up to N20bn in additional capital, and the board has approved starting off with a N5bn rights issue, which is expected to be concluded in the first quarter of 2026.

In its corporate disclosure, the company said, “This represents a strategic first step in the company’s phased recapitalisation agenda, undertaken in alignment with the requirements of the Nigerian Insurance Industry Reform Act recently signed into law by President Bola Tinubu. The NIIRA framework mandates stronger capital buffers and enhanced solvency positions across the insurance sector, reinforcing the need for proactive capital planning by responsible operators. The Rights Issue is projected to be completed within the first quarter of 2026.”

The shareholders of SUNU Assurances Nigeria Plc have approved the company to raise up to N9bn to meet the new minimum capital requirement for non-life insurers under the Nigerian Insurance Industry Reform Act 2025.

The approval was granted at the company’s recent Extraordinary General Meeting held in Lagos.

With the backing of the shareholders, the Board of Directors has now been empowered to raise capital through a mix of rights issues, private placements, public offers or any other fundraising structure, subject to regulatory approval. The board was also authorised to increase the company’s share capital as required, allot new shares, trade untaken rights, engage advisers, and register all changes with the Corporate Affairs Commission.

Before now, the SUNU Group had reaffirmed its commitment to the Nigerian market and said it was willing to recapitalise.

Linkage Assurance at its EGM held last Tuesday received the approval for the additional N16bn capital raise by way of either Private Placement, Rights Issue, Public Offer or a combination, on such terms and conditions, including price, and on dates and times as may be determined by the Board of Directors of the Company, subject to obtaining all relevant regulatory approvals. Secondly, the share capital of the company is and is hereby increased.

Also indicating interest in raising additional funds was Veritas Kapital Insurance, which received shareholders’ approval to raise about N15bn by way of a private placement. The approval came at the 48th Annual General Meeting of the company held in Abuja. Due to the private placement, the share capital of the company would also be increased.

On their part, Lasaco Assurance announced raising about N11.1bn in fresh capital via private placement ahead of the 2026 deadline for recapitalisation, while Regency Alliance also received shareholders’ consent to raise capital through different combinations.

A special resolution at the last AGM of the company read, “That the Directors be and are hereby authorised to capitalise the sum of N2,000,625,000.00 from the Retained Earnings Account and set it free for distribution amongst holders of ordinary shares of the Company on the register of members at the close of business on Friday, the 10th day of October 2025, in proportion to the shares held by them respectively on that day. On condition that the same be not paid in cash but be applied in paying up in full at par for 4,001,250,000 units of ordinary shares of 50 kobo each to be allotted, distributed and credited as fully paid up to and amongst the said holders of ordinary shares in the proportion of one (1) ordinary share of 50 kobo for three (3) ordinary shares of 50 kobo held by them on that date, and such new shares shall rank for all purposes pari passu with the existing issued ordinary shares of the company.”

Meanwhile, the NAICOM has said that it has partnered with the Big Four on capital verification.

Speaking at the EY Insurance Summit on NIIRA 2025, the Commissioner for Insurance, Olusegun Omosehin, who was represented by the Deputy Commissioner for Insurance, Technical, Dr Usman Jankara, quoted the Commission as saying, “To guarantee integrity, NAICOM partnered with the Big 4 audit firms, including EY, for independent verification of compliance with the Minimum Capital. This collaboration ensures credibility, transparency, and confidence in the process. Escrow Account Requirement: Funds raised for recapitalisation shall be deposited in dedicated escrow accounts with the Central Bank of Nigeria, reinforcing governance and safeguarding policyholder interests.”

The PUNCH reports that in an earlier circular, the regulator had highlighted admissible assets for the MCR, stating that encumbered assets, assets without perfected title or ownership, and assets not in the full possession of an insurer/reinsurer shall be inadmissible to meet the MCR.

NAICOM has also hammered on the fact that any company that fails to meet the prescribed MCR within the stipulated timeframe shall be subject to liquidation, merger, or any other regulatory resolution action as may be deemed appropriate by the Commission.

Also at the EY event, the regulator described the industry’s response in the recapitalisation process as encouraging.

“Let me say that the industry’s response has been encouraging, with a very significant number of insurers who have indicated their readiness for capital verification. As we speak, we have about 18 companies that have indicated their readiness for capital verification,” Nairametrics quoted the DCIT as saying.

The Managing Director/Chief Executive Officer of Cornerstone Insurance Plc, Stephen Alangbo, speaking with The PUNCH earlier, noted that the company would not be raising additional capital because it was already able to meet the new MCR.

He said, “For capital, Cornerstone is not going to raise any capital because we are in a position to meet the requirements of the regulator after their confirmation of our position. So, we are not going to merge with any company unless we acquire one. We are not going to raise capital because we have enough capital to recapitalise.”

According to its third quarter report, Cornerstone Insurance’s share capital was N9.08bn, with Shareholders’ Fund in excess of N67bn.

Recall that even before the signing of the bill, Agusto & Co. had anticipated the injection of about N600bn in additional capital as the wind of recapitalisation spread to the insurance sector.