Shareholders back insurers on raising share capital to N9.250 billion

Shareholders have urged operators to boost their share capital to N9.250 billion, in efforts to meet the on-going recapitalisation process in the industry.

The insurance industry recapitalisation, which is slated to elapse by September 30th, 2021, is expected to be robust and capable of taking big risks, as well as contributing to the nation’s Gross Domestic Product (GDP).

Already, operators are articulating their commitment to the exercise; saying a process is a form of a corporate reorganisation, which involves making substantial changes to a company’s capital structure.

Speaking on the development in the industry during its yearly meeting held virtually, the Chairman, Cornerstone Insurance Plc, Segun Adebanji, said bonus shares would be issued in the proportion of seven new shares for every 30 shares of fifty kobo each, already held by shareholders.

Adebanji stressed that the transfer of ₦1.718 billion from the underwriter’s share premium account to the share capital account by issuing bonus shares in the proportion of seven new shares of 50 Kobo each for every 30 existing shares of 50 kobo each, to achieve the Company’s recapitalisation plan.

According to him, the company’s financial performance for 2019, despite the challenging operating environment was able to sustain growth in all its financial indices, as its profit before tax rose by 22 per cent from N3.284 billion in 2018 to N4.013 billion in 2019.

While the company’s profit after tax rose to N4.108 billion in 2019 when compared to N3.017 billion reported in 2018; representing a growth of 36 per cent.

Gross premium written (GPW), also appreciated by 13 per cent from N11.570 billion in 2018 to N13.058 billion in 2019.

He said premium from life insurance accounted for 32 per cent of GPW, an increase from 25 pert in the previous year. The largest contributors to general business gross premium written were bond, engineering and accident N2.12b, oil, and gas (N2.04 billion) and motor (N1.36 billion).

Speaking also with The Guardian, the Managing Director, Prestige Assurance Plc, Sarbeswar Sahoo, one of the companies which embarked on the rights issue, has called on investors to take advantage of its on-going N6.82 billion rights issue to invest in the company, even as it encouraged existing shareholders to increase their right in the company by taking more shares.

The Managing Director of Wapic Insurance, Yinka Adekoya, also commenting on the development, said going forward, the company plans to up its drive for business excellence through sustainable practices, motivated by its commitment to customer satisfaction.

However, the group experienced an 88 percent decline in profit before tax (PBT) to close at N187 million, negatively impacted by the drop in investment and other income, and the growth in underwriting and operating expenses for the period.