In a notice to the Nigerian Stock Exchange (NSE) today, AIICO insurance Plc said it is in non binding talks with a new investor. The company had gotten approval during its 2016 Annual General Meeting (AGM) of shareholders.
Why the capital raise ?
The National Insurance Commission (NAICOM) which regulates the insurance industry has put in place a risk based capitalization programme. Insurance companies would only be able to cover risks that according to how much capital they have. For companies to cover bigger risks, they would have to have more capital. Several insurance companies have also signalled indication to raise their capital base. WAPIC insurance recently sought the approval of shareholders to embark on a capital raise. Figures from AIICO’s HY 2017 financial statements show it had shareholders fund of N8.5 billion. AIICO insurance shares are currently trading at 57 kobo on the NSE, year to date down 6.8%.
AIICO commenced operations in Nigeria in 1963 as an Agency of American Life Insurance Company (“ALICO”) – a subsidiary of American International Group (AIG) at that time. The company was incorporated, registered and licensed in Nigeria as American Life Insurance Company Limited as a wholly owned subsidiary of ALICO/AIG in 1970 to offer Life and Pension products and Insurance services. It was later renamed American International Insurance Company Limited (AIICO) upon the acquisition of a 60% stake by the Federal Government of Nigeria, and later listed on the Nigerian Stock Exchange in 1990, after which shareholders divested.