Fortis Global Insurance Plc is facing mounting solvency risk as a deteriorating solvency margin ratio of just 5% by the end of the 2025 financial year limits the insurer’s legal capacity to underwrite policies and meet future obligations, according to data gathered by MoneyCentral.
Most regulatory authorities—including NAIC, IRDAI, and EIOPA under Solvency II—mandate a minimum solvency margin ratio of 150% (or 1.5x). A weak ratio indicates that an insurance firm’s available capital is failing to keep pace with its liabilities and underlying risk exposure, a critical warning sign requiring urgent capital and risk management adjustments.
Underwriting deterioration
Perhaps more worrisome is that total insurance expenses of ₦1.1 billion are 2.05 times insurance revenue, validating a deteriorating underwriting position. Total insurance expenses surged 217.91% to ₦1.10 billion from ₦347.18 million the previous year, while other operating costs spiked 574.11% to ₦700.07 million as at December 2025.
The insurer, which has been posting recurring operating losses, improved its loss after tax from ₦5 billion as at December 2024 to ₦1.89 billion in 2025, but remains in the red.
Recapitalization shortfall
Fortis Global Insurance has not yet met the recapitalization requirements mandated by the Nigeria Insurance Industry Reform Act (NIIRA) 2025. The company has shareholders’ funds of ₦9.03 billion from a loss position of ₦1.07 billion the previous year, but this falls well short of the capital base required under the new regulatory framework.
Balance sheet restructuring
Fortis Global Insurance (formerly Standard Alliance) bolstered its balance sheet with a debt-to-equity conversion of ₦12 billion after many years of carrying a long-standing, significant foreign liability to Daewoo Securities. While this restructuring improved the equity position, it hasn’t resolved the underlying solvency and underwriting challenges.
MoneyCentral’s Outlook
Fortis Global’s 5% solvency margin ratio—30 times below the 150% regulatory minimum—represents a severe capital adequacy crisis that could force the insurer to curtail underwriting activity or face regulatory intervention.
The company needs urgent capital injection to meet NIIRA 2025 requirements and restore its solvency buffer.
The widening gap between insurance expenses and revenue (2.05x) signals fundamental underwriting problems that capital alone cannot fix. Management must address pricing discipline, risk selection and operational cost control to improve profitability. Without swift corrective action, Fortis Global risks losing its license to operate or being forced into a managed restructuring.
The debt-to-equity conversion with Daewoo Securities was a necessary step to clean up the balance sheet, but the company now faces a more pressing challenge: building sufficient capital to meet regulatory requirements while restoring underwriting profitability. Investors and regulators will monitor whether Fortis Global can secure the funding needed to avoid insolvency.
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