Linkage Assurance Plc has received affirmation from global rating agency AM Best, which maintained the company’s Financial Strength Rating at C++ (Marginal) and its Long-Term Issuer Credit Rating at “B+” (Marginal), with a stable outlook.
The ratings reflect the insurer’s solid balance sheet, tempered by marginal operating performance, a limited business profile, and constrained enterprise risk management.
AM Best highlighted that Linkage’s balance sheet strength is underpinned by its very strong risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by low underwriting leverage. However, the agency noted that the company carries high exposure to illiquid assets, including a single private equity investment representing more than half of its capital and surplus.
In addition, the firm remains exposed to Nigeria’s elevated economic, political, and financial system risks, where all of its assets and revenue are concentrated.
The rating agency also cited Linkage’s operating performance as marginal, largely due to a high, though gradually improving, combined ratio that has exceeded 120 percent in each of the past five years (2020–2024). While the company’s loss ratio has generally been healthy, underwriting profitability has been constrained by a high expense base and small operating scale. AM Best noted that earnings are expected to continue relying heavily on investment income, which may be volatile due to dependence on dividends from the large private equity holding.
Linkage Assurance, a mid-tier player in Nigeria’s insurance market, maintains a diversified portfolio across multiple lines of business, although there is a growing concentration in motor insurance on a net basis. The company is considered well-positioned for organic growth in the expanding Nigerian market, but profitability may remain limited by its modest scale.
Meanwhile, in a strategic move to strengthen its capital base, Linkage Assurance recently disclosed plans to raise ₦12.32 billion through a Rights Issue to meet the Minimum Capital requirement under the Nigeria Insurance Industry Reform Act, 2025.
According to a filing with the Nigerian Exchange Limited (NGX), the company has obtained approval from the Securities and Exchange Commission (SEC) to issue 12,320,000,000 ordinary shares of ₦0.50 each at ₦1.32 per share.
The Rights Issue will be offered to existing shareholders on the basis of two new ordinary shares for every three shares held as of January 22, 2026. Shareholders will receive the Rights Circular via the company’s registrars, Apel Capital Registrars Limited. The offer period runs from March 11 to April 23, 2026, with the rights tradable on the NGX during this period.
Linkage Assurance said the capital raise will not only satisfy regulatory capital requirements but also provide the company with additional resources to expand into strategic areas of its insurance business, while giving shareholders an opportunity to increase their equity stake and deepen their participation in the company’s growth.
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