Fortis Global Insurance, formerly Standard Alliance Insurance Plc, granted a N40 million loan to one of its ex-directors in Kaduna State, who pledged 250 hectares of land as collateral.
This was disclosed in the insurer’s full-year 2025 financial statement released to the Nigerian Exchange on Wednesday. As of the time of closing the account in 2025, the loan had not been repaid by the unnamed former director.
“The loan to a former Director of the Company who pledged 250 hectares of Land at Kaduna State costing N40 million as collateral. The documents of the land have been fully executed but issues relating to consent and ownership have not been perfected,” the struggling insurance company noted.
A financial analyst who spoke with Economy Post noted that there was something fundamentally wrong with the deal.
“No matter where it is in Kaduna, 250 hectares of land shouldn’t be pledged for a N40 million loan,” said an ex-banker, Mr Babatunde Ojunade.
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“Even if a hectare goes for N1 million, which is impossible in today’s Nigeria, the value of the assets will be N250 million. However, he might have taken the loan some years ago and hoped he would repay.
“I have seen related parties such as directors and their family members do that before. The former director must have thought that the insurance company would not sell his land even if he wasn’t able to repay at the agreed time. At the end of the day, what may happen is this: he may be forced to sell one or two hectares to repay the loan – if he does not raise money outside the asset.”
2024 technical insolvency
In the full-year 2024 financial statement, Economy Post reported that the insurer was struggling to stay afloat, weighed down by the old Standard Alliance Insurance legacy issues. It incurred a comprehensive loss of N5.036 billion in the full year of 2024 as against N483.236 million loss reported in the corresponding period of 2023.
Fortis Global Insurance became technically insolvent as its liabilities exceeded assets in 2024. Liabilities stood at N14.834 billion, while the value of Fortis Global Insurance’s assets was estimated at N13.759 billion over the period.
A company is said to be technically insolvent when liabilities outweigh assets. This often casts doubt on the company’s ability to meet obligations, particuarly to creditors.
Fortis Global Insurance’s current ratio in 2024 was less than 1, suggesting liquidity challenges. The current ratio measures a company’s capacity to pay its short-term liabilities due in one year, according to the Corporate Finance Institute. A good current ratio is typically considered to be anywhere between 1.5 and 3. This raised concerns about Fortis’ ability to meet its short-term obligations.
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Its return on assets (ROA), which measures how well a company uses assets like buildings and equipment to generate revenue, was low. The ROA is a very critical profitability ratio in company analysis. An ROA that is less than 5 is considered low. Fortis Global Insurance’s ROA was 1.3, which was low.
Fundamentals improve in 2025
However, the fundamentals of Fortis Global Insurance improved in full-year 2025, despite posting a loss of N1.687 billion.
Though Fortis Global did not turn the corner in 2025, it improved some of its fundamentals. It narrowed losses by 66 percent to N1.69 billion in 2025, from a loss of N4.99 billion in 2024. Its total comprehensice loss for 2025 stood at N1.612 billion, from N5.036 billion reported in 2024.
The insurer also exited the technical insolvency club, as assets stood at N25.052 billion while total liabilities were equal to N15.702 billion. When a company’s assets are greater than its liabilities, it is said to be solvent. Fortis Global remained solvent in the full-year 2025, as against its technical insolvency or asset deficiency status in the corresponding period of 2024.
The insurer also had postive cash flow. In business, cash is king. Cash flow is the movement of money into and out of a company over a certain period of time. If the company’s inflows of cash exceed its outflows, its net cash flow is positive. If outflows exceed inflows, it is negative, Investopedia says.
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“Positive cash flow indicates that a company’s liquid assets are increasing, enabling it to cover obligations, reinvest in its business, return money to shareholders, pay expenses, and provide a buffer against future financial challenges,” Investopedia further says.
“Companies with strong financial flexibility fare better, especially when the economy experiences a downturn, by avoiding the costs of financial distress.” Fortis Global had a positive net cash flows from its operations to the tune of N177.67 million in 2025, as against N71.561 million in the previous year.
Its cash flow from investing activities rose to N302.780 million, up from N124.58 million obtained in 2024. Cash flow from financing activities surged to N10.615 billion in 2025, up from a meagre N156.62 million reported in 2024.
