How N3.4 billion premium is raising investors recapitalisation hopes
Recapitalisation is a form of a corporate reorganisation, which involves making substantial changes to a company’s capital structure. It is one of the strategies companies use to improve their financial stability. Currently, the insurance industry is undergoing the process.
The decision to recapitalise may be taken by the company voluntarily, but sometimes a company undertakes compulsory recapitalisation in compliance with a regulatory directive. In the latter sense, recapitalisation has proven to be a useful tool in the hands of the authorities for sectoral reformation to sustain adequate economic growth and development.
To meet the compulsory recapitalisation requirements by the National Insurance Commission (NAICOM), the sector operators will have to raise additional funds or go through mergers and acquisitions.
Meanwhile, the Nigerian insurance market has been faced with different challenges in its efforts to serve the needs of the relevant stakeholders.
As a result, NAICOM, the body responsible for the regulation of the industry has over time devised different means in its aim to achieve this.
At the 39th yearly general meeting of Anchor Insurance Company Limited, the insurer said it braced the odds to record a gross written premium of N3.4 billion at the close of business in 2018.
This represents 54.38 per cent growth over the performance of N2.2 billion in 2017 and the first of its kind, since the company was established in the past 30 years, but mostly, raising its hopes on the recapitalisation agenda.
The company, during the meeting also ratified a dividend of two kobo per ordinary shares to reward shareholders, while promising to ensure a geometric improvement in the different relevant indices come 2019.
Chairman of the company, Dr. Elijah Akpan, at the meeting held at Ibom Le’ Meridien and Golf Resort, Uyo, Akwa Ibom State, attributed the successes to teamwork and determination of workers “to change the age-long premium narrative.
The company, in a bid to make a difference, also recorded positive headways in 2018 to include net premium of N2.8 billion against N2 billion in 2017, showing 41.6 per cent improvement over the performance in the corresponding year, while investment and incomes hopped from N229.4 million in 2017 to N244.9 million in 2018, indicating 6.75 per cent rise over the performance in 2017.
Profit before tax also rose to N220.2 million in 2018 from N180.3 million in 2017, representing 22.12 per cent increase over 2017, while profit after tax stood at 22.87 per cent from N133.3 million in 2017 to N163.8 million in 2018.
Total assets experienced 5.37 per cent rise from N6.2 billion in 2017 to N6.6 billion in 2018 and shareholders’ funds rose to N5.2 billion in 2018 from N5.1 billion, showing 1.67 per cent increase respectively.
Akpan stated that the company commissioned and opened Anchor Insurance Multi-Purpose Building in Uyo, appointed a new Executive Director, Technical and engaged Head, Claims/Re-Insurance, which has ensued in the tremendous improvement of underwriting/claims administration amongst others.
While assuring that 2019 would be more fruitful considering the achievements so far recorded, he called for all hands to be on deck to realize the recapitalisation of the company for big-ticket businesses.
He added that the company would invest more in brand repositioning projects and expand product basket to open rooms for additional income.