• Sovereign Trust Insurance will launch a rights issue to raise up to NGN 5 billion (USD 3.5 million).

• Nigeria’s new Insurance Industry Reform Act sharply increases capital requirements for all insurers.

• Shareholders previously approved raising up to NGN 20 billion to strengthen the balance sheet and expand underwriting capacity.

Nigeria has initiated a major insurance-sector reform that requires all companies to increase their capital bases in order to strengthen solvency and reinforce the industry’s resilience. Sovereign Trust Insurance has started the first phase of its recapitalization plan.

Sovereign Trust Insurance plans to raise up to NGN 5 billion (about $3.5 million) through a rights issue, the insurer announced after notifying the Nigerian Exchange (NGX).

The company said in a statement released Wednesday, 26 November 2025, that its board approved the transaction to comply with the newly enacted Nigerian Insurance Industry Reform Act (NIIRA), signed into law by President Bola Ahmed Tinubu.

The regulation mandates a substantial rise in minimum capital requirements and higher solvency thresholds across the industry. The NIIRA raises minimum capital from NGN 2 billion to NGN 10 billion for life insurers, from NGN 3 billion to NGN 15 billion for non-life insurers, and from NGN 10 billion to NGN 35 billion for reinsurers.

Sovereign Trust Insurance aims to meet these standards while supporting its growth strategy. The company intends to complete the rights issue during the first quarter of 2026, subject to regulatory approvals. Management is already working with financial advisers, lawyers and auditors to finalize the structure of the operation.

The initiative follows the insurer’s 30th Annual General Meeting held in September 2025, during which shareholders authorized the company to raise up to NGN 20 billion to strengthen its balance sheet, improve liquidity and expand underwriting capacity.

Chief Executive Olaotan Soyinka urged shareholders to fully support the capital raise when launched. He said the company continues to invest in digitalization, innovation and customer-experience enhancement, which he considers essential in a transforming insurance market. He added that these efforts will help Sovereign Trust Insurance pursue its ambition to enter Nigeria’s top five insurers.

Sandrine Gaingne