Why insurers seek shareholders’ nod to raise billions in rights issue
As insurers express commitment to the ongoing industry recapitalisation exercise, they have explained that the 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.
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.
Determined for the well-being of its value shareholders in the industry, AIICO Insurance Plc is positioning to leave no stone unturned in its continued efforts to create and protect its customers’ wealth and deliver value to its stakeholders.
This has reflected in its year-on-year upward trajectory in performance in both life and general businesses.
The Head, Strategic Marketing and Communications Department, Segun Olalandu, who explained this to The Guardian, noted that the phenomenal growth of AIICO’s balance sheet has a direct correlation to its customer base, which comprises of retail customers across the length and breadth of the nation and corporate/institutional businesses from both the private and public sectors.
In fulfilment of its obligation to its delighted customers, the company has paid out over N90 billion in claims and benefits between 2014 and 2018, resulting in an annual average growth of 27 per cent. “We value the trust our customers have invested in us.”
The Managing Director and Chief Executive Officer, Babatunde Fajemirokun, who spoke on the development during a recent engagement with some members of the House of Representatives, said preparation are in top gear to meet the industry recapitalisation requirements set by the National Insurance Commission (NAICOM).
Besides the private placements recently concluded with investments from LeapFrog (a leading private equity firm), an Extra-Ordinary General Meeting is scheduled to be held on March 5, 2020 to get shareholders’ approval through rights issue.
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