• Nigerian insurers Guinea, Sovereign Trust seek 10.8bn naira capital
• Guinea launches rights issue; Sovereign Trust awaits NGX approval
• Raises aim meet stricter NAICOM capital requirements across insurance sector

Two Nigerian insurers, Guinea Insurance and Sovereign Trust Insurance, have launched capital-raising operations on the Nigerian Exchange Limited (NGX) to raise more than 10.8 billion naira ($7.9 million).

Guinea Insurance has already obtained NGX approval and launched a rights issue on March 16. The offer covers 5.295 billion ordinary shares of 50 kobo each at 1.10 naira per share, raising about 5.8 billion naira.

Existing shareholders can subscribe to two new shares for every three held. The capital raise is expected to lift the company’s capital to nearly 10 billion naira, from 4 billion naira at end-2024.

Meanwhile, Sovereign Trust Insurance is still awaiting NGX approval. The company has applied to issue 2.51 billion shares of 50 kobo each at 2 naira per share, for a total of 5.02 billion naira. The offer is structured at three new shares for every 17 held, with a qualification date of March 17.

Both capital raises aim to meet new capital requirements set by the National Insurance Commission (NAICOM), which mandate minimum capital of 10 billion naira for life insurers, 15 billion naira for non-life firms and 35 billion naira for reinsurers.

“This capital raise represents an important step in repositioning the Company to meet these realities while expanding our capacity to deliver innovative insurance solutions across key sectors of the economy,” said Guinea Insurance Board Chair Temitope Borishade. He added that the move underscores the firm’s commitment to clients, brokers and shareholders, with improved returns expected.

The new regulatory framework aims to strengthen insurers’ financial position and boost their contribution to the economy, which remains underdeveloped compared with other major African markets. In 2024, insurers generated 1.562 trillion naira in premiums, up 56% year-on-year, according to Nigerian Insurers Association Chairman Kunle Ahmed. Non-life premiums totaled 1.092 trillion naira, versus 470 billion naira for life insurance, while claims paid reached 622 billion naira.

SG