Wapic Insurance Plc has given the reason for non-payment of dividend to its shareholders for the year ended 31 December 2017.
Mr. Aigboje Aig- Imoukhuede, Chairman, Wapic Insurance Plc, while speaking at the company’s 59th Annual General Meeting in Lagos noted that the decision not to pay dividend was due to signals from its Nigeria and Ghana operations on the likelihood of a rise in capital requirements.
According to Daily Trust, he further said the board recognizes the importance of dividends to its shareholders but given the possibility of an increase in regulatory capital requirements soon, it does not deem it prudent to recommend payment for the period ended December 31, 2017.
Losses from its Ghana operations
Wapic Insurance’s Managing Director/Chief Executive Officer, Adeyinka Adekoya, said the losses recorded from Ghana operations was due to legacy issues it incurred which they have to address.
He pointed out that an executive director has been sent to supervise the operations in Ghana and he has been helping to drive business growth.
According to Adekoya, growth in the insurance sector has been hampered by liquidity issues, foreign exchange and other macro and micro economic factors that stifled much-needed premium revenue.
In its financial report for the full year ended 31 December 2017, the company’s Gross premium increased from N8 billion in 2016 to N9.8 billion in 2017. The net claim expenses also increased from N2.8 billion in 2016 to N3.1 billion in 2017, while its underwriting profit increased from N380 million in 2016 to N1.54 billion in 2017.
Wapic Insurance Plc had last year signified its intention to raise up to N10 billion in fresh capital.
The company had to raise the capital in order to meet the risk-based supervision by the National Insurance Commission (NAICOM).
Risk-based supervision means insurance companies will only be able to insure risks that their capitalization can conveniently accommodate.
Wapic Insurance was founded in 1950 and listed on the Nigerian Stock Exchange (NSE) in 1998.
The company has two subsidiaries Wapic Life insurance and Wapic Insurance Ghana.
Its shares are trading at N0.47 on the floor of the NSE with its one year return down by 11.32%.