By Itohan Abara-Laserian
Consolidated Hallmark Insurance (CHI) Plc has promised not to relent in boosting working capital as it awaits developments in the recapitalisation journey of the insurance industry.
The Chairman, Board of Directors, CHI Plc, Mr Obinna Ekezie, made the assertion in a statement issued after the company’s 26th Annual General Meeting held on Sept. 2 in Lagos.
Ekezie said that the local insurance operating environment was characterised by activities of operators geared towards meeting the recapitalisation thresholds set by the National Insurance Commission (NAICOM) the previous year.
He said that the first phase of the recapitalisation exercise required that operators met a minimum of 50 per cent of the new requirement by December 2020 and the balance to be met in September 2021.
“Initial efforts by some operators in this regard led to the injection of capital by foreign investors while mergers and acquisition processes and capital raise were initiated by some other operators before the exercise came to an abrupt halt following a Dec. 21, 2020 restraining order of a Federal High Court in Lagos.
‘The court action was filed by a group of shareholders to restrain the NAICOM from continuing with the recapitalisation exercise.
“Your company, however, proactively continued with the raising of additional capital, with a successful Rights Issue where 2,032,500,000 shares were offered and fully subscribed, notwithstanding the limitations imposed by the pandemic.
“We thank you for your immense support which culminated in the success of the capital raise and shall not relent in taking further steps to boost our working capital as we await further developments on recapitalisation from the industry regulator.
“The next phase of our fund drive shall be conveyed to you, distinguished shareholders, as we take denite steps towards meeting the N10 billion threshold, subject to further developments in the industry,” he said.
While reviewing the company’s 2020 financial result, Ekezie said that it recorded significant growth in key performance indices.
He said that this was achieved amid challenges in the global and local economy owing to the COVID-19 pandemic among others.
“With the benefit of hindsight, we are quite optimistic that future operating results would be significantly improved upon as the Macro Economic Environment and Global Outlook presents brighter pictures in the years ahead.
“With business operations now getting back fully to normal and the effects of the global pandemic gradually waning, especially in our local operating environment, we are quite hopeful of further improvement in performance,” he said.
The Group Managing Director/Chief Executive Officer, Mr Eddie Efekoha, said that the company had achieved 50.7 per cent of the mandated N10 billion thresholds by raising its capital to N5.06 billion in November 2020.
This, he said, was ahead of the earlier deadline of Dec. 31, 2020 for 50 per cent as a general business insurer.
“Your company shareholders fund stood at N8.03billion as at end of December, 2020.
“Although the industry recapitalisation programme is currently on hold, NAICOM has continued to adopt other measures and initiatives for the effective regulation of the industry.” Efekoha said.
He said that these include the automation of the Annual Returns filing and licensing of more insurance companies to stimulate competition in the market.
“They have also allowed existing operators to establish micro-insurance business as a department: a development that is intended to drive up financial inclusion and increase insurance penetration in Nigeria,” he said.
The News Agency of Nigeria (NAN) reports that the summary of key figures in the company’s 2020 financial result showed an all-time high Gross Premium Written of N9.77 billion.
This represents a 12 per cent growth when compared with the N8.69 billion reported in the same period of 2019.
The Net Underwriting Income grew to N6.5 billion in 2020 from N5.46 billion in 2019.
Claims expenses rose by 21 per cent to N4.17 billion in 2020 from N3.45 billion recorded in 2019.
Also, a modest growth of 8.6 per cent was recorded in profit before tax which moved to N772 million in the period under review from N711million recorded in 2019.
Profit after tax increased to N677.98 million from N600.31 million in 2019.
Total Assets increased by 22 per cent, growing to N14.31 billion from N11.74 billion achieved in 2019.(NAN) (www.nannews.ng)