AXA Mansard Insurance Plc is trying to downsize its business activities as part of its efforts to review the growth strategy.
The insurance company is reportedly considering divesting from its existing investments to reduce the scope of its business portfolio.
The move is a part of AXA Mansard Insurance’s corporate growth strategy. The board is now awaiting approval of this plan but an extraordinary general meeting of shareholders will be held first. The meeting will afford the management the opportunity to get authorisation to implement its plans. But the proposal will first be deliberated on at the shareholders meeting.
The Extraordinary General Meeting of shareholders will hold on February 13, 2020, in Lagos. The outcome of the meeting is expected to lead “to divest from any existing investment assets in furtherance of the objectives of the company”.
Divestment of investment is a strategy employed by companies to eliminate, sell, close or spin-off some of their existing investments to reduce the scope of their business activities. The new development comes amidst the resignation of Tosin Runsewe, an Executive Director of AXA Mansard Insurance Plc. Runsewe resigned from the company’s board. His resignation will take effect from January 31, 2020.
The board also proposed the appointment of two new Executive Directors. They are Rashidat Adebisi and Tope Adeniyi who are awaiting the approval of the National Insurance Commission (NAICOM).
AXA Mansard in a recapitalised market: Companies in the insurance market, including AXA Mansard, in Nigeria have been busy trying to meet up with the new recapitalisation plan of NAICOM. The recapitalisation plan compels the companies to raise new capital in order to meet up with the new share capital requirement issued by NAICOM.
The new capital structure for Life, Non-Life and Composite insurance companies, including reinsurance companies, were increased from N2 billion, N3 billion, N5 billion and N10 billion to N8 billion, N10 billion, N18 billion and N20 billion respectively.
The deadline to meet the new capital base has been extended from June 2020 to December 2020. It was extended after several criticisms of the timeframe and the impact the policy would have on the number of available underwriting firms.