CORNERSTONE INSURANCE AND ITS STANCE ON RECAPITALIZATION
1. Position on Recapitalisation
- Company Readiness:
- Stephen Alangbo, Managing Director of Cornerstone Insurance Plc, stated that the company is prepared for any upcoming recapitalisation measures by the National Insurance Commission (NAICOM). He believes these measures will strengthen the company's financial stability, expand its underwriting capacity, and enable investment in new technologies and innovative products.
- Commitment to Vision:
- Alangbo reaffirmed the company’s commitment to becoming a leading insurance-based financial services group. He emphasized the company's focus on innovation, technology investment, and maintaining integrity while meeting the evolving needs of customers and communities.
2. Insurance Industry Reform Bill 2024
- Proposed Changes:
- The Nigerian Insurance Industry Reform Bill 2024, which has passed a second reading in the Senate, proposes significant increases in the minimum capital requirements for insurance companies. Specifically, it suggests raising the minimum for life insurance companies from N2 billion to N15 billion, for general insurance from N3 billion to N25 billion, and for reinsurance from N10 billion to N45 billion.
- Context of Reform:
- This reform comes amidst an ongoing recapitalisation exercise for Nigerian banks, indicating a broader trend towards enhancing financial sector stability and capacity.
3. Shareholder Concerns and Company Response
- Shareholder Feedback:
- During the annual general meeting (AGM), shareholders expressed concerns about the potential impact of recapitalisation measures on the business.
- Moses Igbrude from the Independent Shareholders Association of Nigeria inquired about the company's preparations for the new bill and its implications.
- Shareholder Nornah Awoh questioned what actions the company would take in response to the recapitalisation, expressing concerns about dividend payouts and future financial strategies.
- Company’s Strategic Focus:
- Chairman Segun Adebanji highlighted the company's focus on increasing insurance penetration in Nigeria through retail business expansion. He emphasized the goal of making insurance products more accessible to a broader population to enhance financial security and resilience.
4. Financial Performance
- Growth Metrics:
- For the financial year ending December 2023, Cornerstone Insurance reported a 38% increase in revenue, reaching N30.6 billion compared to N22.2 billion in 2022.
- The company’s insurance revenue, under the new IFRS 17 standards, was N25.91 billion, a 26.5% increase from N20.48 billion in the previous year.
- Profit before tax improved significantly to N17.08 billion, a turnaround from the restated IFRS 17 loss of N1.06 billion in the prior year.
1. Position on Recapitalisation
- Company Readiness:
- Stephen Alangbo, Managing Director of Cornerstone Insurance Plc, stated that the company is prepared for any upcoming recapitalisation measures by the National Insurance Commission (NAICOM). He believes these measures will strengthen the company's financial stability, expand its underwriting capacity, and enable investment in new technologies and innovative products.
- Commitment to Vision:
- Alangbo reaffirmed the company’s commitment to becoming a leading insurance-based financial services group. He emphasized the company's focus on innovation, technology investment, and maintaining integrity while meeting the evolving needs of customers and communities.
2. Insurance Industry Reform Bill 2024
- Proposed Changes:
- The Nigerian Insurance Industry Reform Bill 2024, which has passed a second reading in the Senate, proposes significant increases in the minimum capital requirements for insurance companies. Specifically, it suggests raising the minimum for life insurance companies from N2 billion to N15 billion, for general insurance from N3 billion to N25 billion, and for reinsurance from N10 billion to N45 billion.
- Context of Reform:
- This reform comes amidst an ongoing recapitalisation exercise for Nigerian banks, indicating a broader trend towards enhancing financial sector stability and capacity.
3. Shareholder Concerns and Company Response
- Shareholder Feedback:
- During the annual general meeting (AGM), shareholders expressed concerns about the potential impact of recapitalisation measures on the business.
- Moses Igbrude from the Independent Shareholders Association of Nigeria inquired about the company's preparations for the new bill and its implications.
- Shareholder Nornah Awoh questioned what actions the company would take in response to the recapitalisation, expressing concerns about dividend payouts and future financial strategies.
- Company’s Strategic Focus:
- Chairman Segun Adebanji highlighted the company's focus on increasing insurance penetration in Nigeria through retail business expansion. He emphasized the goal of making insurance products more accessible to a broader population to enhance financial security and resilience.
4. Financial Performance
- Growth Metrics:
- For the financial year ending December 2023, Cornerstone Insurance reported a 38% increase in revenue, reaching N30.6 billion compared to N22.2 billion in 2022.
- The company’s insurance revenue, under the new IFRS 17 standards, was N25.91 billion, a 26.5% increase from N20.48 billion in the previous year.
- Profit before tax improved significantly to N17.08 billion, a turnaround from the restated IFRS 17 loss of N1.06 billion in the prior year.