Sovereign Trust Insurance Plc has announced a significant step in its long-term recapitalisation strategy following the approval of a N5 billion Rights Issue by its Board of Directors. This marks the beginning of a phased effort to meet new regulatory requirements under the Nigerian Insurance Industry Reform Act (NIIRA).
The announcement was made by the company’s Head of Corporate Communications & Investor Relations, Segun Bankole, in a notice filed with the Nigerian Exchange Limited (NGX) on Wednesday.
According to the statement, “Sovereign Trust Insurance Plc (the ‘Company’) notifies its shareholders and the investing public that its Board of Directors, chaired by Mr Abimbola Oguntunde, has approved an initial capital raise of N5 billion through a Rights Issue.”
Bankole explained that the move 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 (NIIRA) recently signed into law by His Excellency, President Bola Ahmed Tinubu, GCFR.”
He added that the NIIRA regime 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 expected to be completed in the first quarter of 2026. Bankole confirmed that “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.”
The announcement follows the company’s 30th Annual General Meeting held on September 25, 2025, where shareholders endorsed several resolutions aimed at strengthening the insurer’s financial footing. Bankole noted that “chief among these was the endorsement of a capital raise of up to N20 billion to reinforce the balance sheet, improve liquidity buffers, and expand underwriting capacity in line with the heightened capital expectations introduced under the NIIRA regime.”
Shareholders also approved a 5 kobo dividend per share—an action the company said demonstrates investor confidence. According to Bankole, “the market responded positively to these developments, with the Company’s stock emerging among the top gainers on The Nigerian Exchange (NGX) over several trading sessions in October 2025 – a clear indication of growing investor confidence and the strength of the Company’s operational fundamentals.”
Managing Director/Chief Executive Officer, Mr Olaotan Soyinka, also commented on the developments. Bankole quoted him as reaffirming management’s commitment to repositioning the firm, stating that Soyinka “reiterated Management’s resolve to position the Company among the top five insurers in Nigeria, a target aligned with industry benchmarks for operational efficiency, premium growth, and digital service delivery.”
Soyinka further urged shareholders to take full advantage of the upcoming Rights Issue, stressing that the company remains focused on innovation and sustainable growth. According to him, “these pillars are critical for sustaining long-term performance, improving customer experience and consolidating the Company’s position in a rapidly evolving insurance landscape.”
The N5 billion Rights Issue is expected to serve as the foundation of a broader capital programme that will support Sovereign Trust Insurance’s ambition to expand its underwriting capacity and maintain competitiveness under the strengthened regulatory environment.
