Cornerstone Insurance upbeat on recapitalisation

Cornerstone Insurance Plc has said that it is well positioned for any recapitalisation measures to be announced by the National Insurance Commission.

This was disclosed by the firm’s Managing Director, Stephen Alangbo, during the 32nd annual general meeting held in Lagos on Wednesday.

He said, “We are well positioned for any recapitalisation measures that may be introduced by the regulator. We believe that this will enhance our financial stability, expand our underwriting capacity and allow us to invest in new technologies and innovative products.

“As we look ahead, we remain steadfast in our vision of becoming the leading insurance-based financial services group. Our commitment to being a responsible and sustainable business that creates long-term value for all our stakeholders remains unwavering. We will continue to innovate, invest in our people, invest in technology, and operate with integrity while staying responsive to the evolving needs of our customers and communities.”

The Nigerian Insurance Industry Reform Bill 2024, which has scaled a second reading on the floor of the Senate, is seeking to increase the minimum capital requirement of life insurance companies from the current N2bn to N15bn, and general business from N3bn to N25bn.

This means that the reinsurance business will be increasing from N10bn to N45bn.

The new bill comes during an ongoing recapitalisation exercise by Nigerian banks.

At the AGM, some shareholders expressed concerns about the recapitalisation move and its impact on the business.

The National Coordinator of the Independent Shareholders Association of Nigeria, Moses Igbrude, asked, “What are you as a company doing to envisage the outcome of the bill? How are you preparing your preparation will help us in the years ahead?”

Another shareholder, Nornah Awoh, echoed similar sentiments, asking what the company was going to do differently.

“If you ask me, I would say that the 25 kobo (dividend), which is the highest in the history of the company is even low for you to pay us this year but I’m conscious of recapitalisation. So what are you going to do differently? It is easy for us to collect 16 Kobo today and be clapping and you come tomorrow to say, ‘Go and bring money’,” he averred.

Meanwhile, the chairman of Cornerstone Insurance, Segun Adebanji, stated that the firm was targeting to improve insurance penetration in Nigeria by boosting its retail business.

He said, “We are placing a significant emphasis on improving insurance penetration within Nigeria by growing our retail business. By expanding our reach and making insurance products more accessible to the wider population, it is our goal to enhance financial security and resilience among Nigerians. The focus on retail growth will be a key driver of our strategy to increase market penetration and foster a more inclusive Insurance landscape.”

For the financial year ended December 2023, Cornerstone Insurance recorded 38 per cent growth in its topline to N30.6bn from N22.2bn in 2022.

Following the implementation of the new IFRS 17 standards, the group reported an insurance revenue of N25.91bn for the year under review, representing a 26.5 per cent growth compared to N20.48bn in the prior year.

Its profit before tax stood at N17.08bn, indicating a rise over the restated IFRS 17 loss of N1.06bn recorded in the previous year.