NICON Insurance restructures, plans return to profitability
• Blames govt’s interference for company’s financial misfortunes
• Clears all outstanding claims, targets N5b premium in 2016
• Introduces new product
The new management of National Insurance Company of Nigeria (NICON), has initiated plans to return the company to profitability through restructuring of operations for quick settlement of claims to policy holders and handsome reward for investors by way of dividends, according to its new Managing Director and Chief Executive Officer, Samuel Bayode.
The National Insurance Commission (NAICOM), the insurance industry regulatory body in Nigeria last year confirmed the appointment of Mr. Bayode Samuel as the Managing Director/Chief Executive Officer of NICON with over 30 years of experience in insurance practice. He was until his new appointment the Executive Director (Technical) of the NICON Insurance company.
Speaking to newsmen in Abuja on the outlook for NICON for 2016, the new helmsmen declared that NICON will return to profitability at the end of the year, pointing out that fresh strategies have been employed to reposition the company and raise its market share up by at least 50 per cent from its current position.
He blamed the seeming poor performance of NICON after privatization in 2005 to government’s intervention, when it forcefully took over the entity again after a successful acquisition process, declaring that the intervention negatively drilled funds leakage hole in the activities of the group and has since then affected her operations.
The development notwithstanding, he reassured that NICON will this year return to profitability, courtesy of the new products introduced and overall restructuring arrangement of the group being undertaken.
Bayode said : “ NICON after privatization was meant to be agile and move at that fast pace expected of a private sector entity. Don’t forget this company was a government corporation for more than forty years before it was privatized. As a business entity working under government bureaucracy, you wouldn’t expect anything less from what had happened to the company at that time. After privatization, of cause it is natural, a lot of patronages, a lot of accounts will leave NICON Insurance , so it now became an open place for everybody to partake. There were some accounts that were being run by NICON that were not profitable, so NICON excited some of them
“For instance, with a premium of N17 billion in 2005, NICON declared loss of N5 billion, but when we took the Company over the next year , we recorded a premium income of 2006 N12 billion but we recorded a profit of about N5 billion and we were able to share dividends too to shareholders.
“But as we were celebrating that NICON is a changed company that can declare dividend, government came to say it was taking over NICON Insurance, they came with armed men and police to take over the management of NICON Insurance, as we were not armed, we voluntarily exited, but it was alien to any law to carry out that act. At that point in time, private co-investors that took over NICON then had 70 percent share while BPE had 30 per cent share, if the 30 per cent shareholder is now laying claim of ownership then it is left for the court to determine who the owners were at that time. After seeing the documentation, court ruled that as far as we are concerned, these (co-private investors with 70 percent share) are the owners of NICON, you can only sort out your issues at the board level, negotiate and settle out of court.
“In essence, we have seen a company (NICON) that was bastardized left right and centre, by the time we came back to take over the company, they have accrued a massive hole in the finances of the company when the government took over so much so that at the end of the day, we were asked to inject 17.5 billion into our operations. At that time, government said they were not injecting anything, they were only able to give us N900 million. The shareholding at that time was diluted to the extent that government had 18 percent while co-investors had 82 per cent.”
Now, however , following the re-structuring of NICON which actually started in 2013 we are gradually getting back to our feet. You couldn’t have seen much visibility of NICON insurance but now, we are gradually moving to where we belong by re-strategizing and having a roadmap to get us out of the mess.
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