Underwriters’ strategy for share capital growth
As insurers express commitment to the ongoing industry recapitalisation exercise, they have explained that a process is a form of 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, post recapitalisation, is expected to be robust and capable of taking big risks, as well as contribute meaningfully to the nation’s Gross Domestic Product.
The decision to recapitalise may be taken by the company voluntarily, but sometimes a company undertakes compulsory recapitalisation in compliance with a regulatory directive.
For Capital Express Assurance Limited, the new direction has already increased its authorised share capital from N7.5 billion to N8billion. This is in compliance with the new minimum capital requirement for life insurance companies set by the National Insurance Commission.
The Managing Director/Chief Executive Officer, Mrs. Bola Odukale, who spoke to The Guardian over the weekend, during the company’s year end media chat in Lagos, said to ensure a smooth recapitalisation, the company is in talks with three companies for acquisition purposes.
Odukale said the shareholders at their meeting approved rights issue and private placement as complementary efforts, which were part of the plans submitted to the board and NAICOM as part of its roadmap.
“We have continued to follow our plans meticulously and would continue to review the implementation until our objectives are met according to the timeline set for ourselves,” she said.On the recapitalisation generally, she stated that the organisation was going to concentrate on its life operations but continue to maintain its investments in viable general business firms. She said that the organisation had repositioned for growth resulting from the recapitalisation agenda approved by the board.
The insurer added that the number of investors interested in investing in the company’s private placement was encouraging.She informed the gathering that in 2020, the focus would heavily be on the retail arm of the business as that was the strength of any life office.
“More investments in the area of manpower and IT infrastructure would be enhanced to meet up with the growing demands of excellent and efficient service delivery on the retail side of the business,” she said.
Odukale thanked the board, management and staff of the organisation for their support, co-operation and loyalty to the brand over the years which had made it a force to be reckon with in the life insurance arm of the industry in the country.
The Capital Express boss urged the staff to continue to give their best to the company, informing them that the board approved a lot of welfare incentives which would commenced at the end of recapitalisation next year.She stated that every customer of the firm should expect more going forward as serving them better was her number one priority always.
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