Coronation Insurance, others  seek approval to raise N100bn

Coronation Insurance Plc, among others insurance companies are concluding arrangements to raise about N100 billion in the first cluster of the industry’s recapitalisation plan.

Nigerian Insurance Industry Reform Act (NIIRA) 2025 increased the minimum capital for life insurance businesses from N2 billion to N10 billion, non-life insurance firms from N3 billion to N15 billion and reinsurance companies from N10 billion to N35 billion.

Coronation Insurance has scheduled an extraordinary general meeting for next week to seek approval of shareholders to undertake a N9 billion private placement. The virtual meeting is expected to empower the directors of the company to raise such fund through foreign or naira-denominated issuance.

Already, Guinea Insurance has launched its capital raising, with existing shareholders expected to provide N5.82 billion to strengthen the capital base of the company and enhance its underwriting capacity.  Guinea Insurance is offering 5.295 billion ordinary shares of 50 kobo each at N1.10 per share. The shares have been pre-allotted to shareholders on the basis of two new ordinary shares for every three ordinary shares held as at the close of business on January 21. The rights issue is scheduled to close on May 1.

Universal Insurance, which had secured shareholders’ approval to raise up to N15 billion, has submitted application to raise N3.2 billion through a rights issue, giving existing shareholders the first opportunity to recapitalise the company.

Universal Insurance plans to issue 2.667 billion ordinary shares of 50 kobo each to existing shareholders in the book of the company as at March 30, at N1.20 per share. The rights issue will be pre-allotted on the basis of one new share for every six ordinary shares held.

Shareholders of Fortis Global Insurance has secured shareholders’ approval “to take all necessary steps to raise additional capital for the company to meet the mandatory minimum capital requirement in any form and through any structure, including without limitation, equity, debt, quasi-equity or hybrid instruments”.

Insurers are exploring all forms of capital raising methods including recapitalisation by existing shareholders, public offer, private placement and special placement.

The capital raising could be by way of ordinary shares, preference shares, debentures, bonds, notes, subordinated instruments, convertible or non-convertible instruments, mezzanine financing, rights issues, private placements, public offers, or any other capital or debt instrument or structure permitted under applicable law.

Experts were unanimous that the insurance sector’s recapitalisation would also follow the same trend like the banking recapitalisation, generating substantial inflows from foreign and domestic investors. By the March 31 deadline, the banking recapitalisation raised N4.65 trillion in new equity funds, with 72.55 per cent of capital sourced locally and 27.45 per cent from international markets.

Agusto & Co estimated that recapitalisation of existing insurance businesses alone would add some N600 billion in new equity funds to the insurance industry. Recapitalisation is expected to provide headroom for operational performance as insurers sweat out to optimise enlarged assets.