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Many insurance firms need to urgently embrace consolidation and recapitalisation to remain afloat, as their shareholders’ funds have declined below statutory requirement, The Guardian has learnt.
A meeting with some industry big players held in Lagos recently, revealed that the shareholders’ funds of some seven firms are presently below statutory capital requirement, whilst those of 10 others, are slightly above the required capital base.
In the last insurance industry recapitalisation, Non-Life insurance firms were mandated to raised their shareholders’ fund to N3 billion; Life Insurance operators N2 billion, Composite N5 billion and Reinsurance N10 billion.
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But the 2014 Insurance Digest, published by the Nigerian Insurers Association (NIA), showed that the shareholders’ funds of Standard Alliance Life Company Limited stood at N720.92 million against the statutory N2 billion; International Energy Insurance Plc had N1.5 billion, against N3 billion; and Goldlink Insurance Plc -N3.90 billion.
Others with negative funds wee, Investment & Allied Insurance Plc N955.26 million; Unic Insurance Plc N2.70 billion and SpringLife Assurance Plc N351.12 million.
Firms with funds slightly above the required capital included Sterling Assurance Nigeria Limited N3.1 billion; Staco Insurance Plc N3.17 billion; Equity Assurance Plc N3.43 billion and Capital Express Assurance Limited N2.06 billion.
Commissioner for Insurance Mohammed Kari, has stressed that consolidation is inevitable in the industry, adding that there are many players in the industry who do not add value to the services they provide.
