NEM Insurance Plc’s Chairman, Dr. Fidelis Ayebae, has disclosed the company’s intention to increase its issued share capital. According to Ayebae, this would be done by proactively raising fund. This is in addition to the company’s plan to acquire a life insurance company.
The decision to raise capital may have been reached in view of the recent increase in capital requirements by the National Insurance Commission (NAICOM).
Speaking during NEM Insurance Plc’s Annual General Meeting (AGM), Mr Ayebae noted that a further upward review of base capital should not be ruled out.
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Recall that not too long ago, the National Insurance Commission (NAICOM) had introduced the tier-based minimum solvency capital, a situation that was later canceled after it was challenged in court.
Specifically, the capital requirements for life insurance firms were increased from N2 billion to N8 billion. Insurance firms underwriting general business have been mandated to shore up their capital from N3 billion to N10 billion.
Composite insurance firms, that is, firms underwriting both life and general business will raise their capital from the current N5 billion level to N18 billion. Reinsurance firms will move up from the current minimum capital of N10 billion to N20 billion.
Back to Nem Insurance Plc, the company’s gross premium witnessed a 12.2 percent increase in 2018, having risen to N15 billion in 2018 compared to a turnover of N13.4 billion in 2017.
The company recorded a 20 percent increase in gross claims during the period under review, having paid out N6.01 billion compared to N5.01billion in 2017.
Profit after tax, therefore, decreased by 13.2 percent in 2018, with the company recording N2.69 billion as against N3.09 billion in 2017.
NEM Insurance was incorporated in 1970 and listed on the Nigerian Stock Exchange in 1989. The company’s stock is currently trading N2.30 on the floor of the Nigerian bourse.