L-R: Chidiebere Nwokeocha- Executive Director Institutional Business, Ganiyu Musa- GMD/CEO Cornerstone Insurance Plc and Adewale Foster-Aileru- Group Head, Strategy, Investor Relations & ERM at the event.
BY NKECHI NAECHE-ESEZOBOR-–Cornerstone Insurance Plc is upbeat on meeting the June 2020 recapitalisation deadline given by the National Insurance Commission, (NAICOM) to all insurance companies to upgrade their capital to the new threshold.
The regulatory body had earlier mandated ordered insurance companies with composite licence to upgrade their capital base from N5 billion to N18 billion; Life insurance firms were required to increase their minimum capital requirement from N2 billion to N8 billion, amounting to 400 per cent increase in their capitalisation.
Similarly, General insurance companies are to raise their capital base to N10 billion from N3 billion , even as Reinsurance Firms will now need N20 billion capital base to operate Reinsurance business in the country.
Cornerstone Insurance Plc, being a firm underwriting General Business, will need to upgrade its capital to N10 billion to continue to operate beyond June 2020.
Speaking to journalists at the company’s head office in Victoria Island, Lagos, yesterday, its Group Managing director/CEO, Mr. Ganiyu Musa, said, the company is in a comfortable financial situation to scale through the exercise, adding that, the sale of its property along Lekki axis has further increase the liquidity of the insurance company to meet and surpass expectations.
Stating that the company would have loved to keep the property for the long run, but was challenged with the fact that real estate investment is not admissible in the ongoing recapitalisation exercise.
This, according to him, necessitated the sale of the building for an handsome amount that covers the cost of the building project and still left with profit.
“We want to hold the building for the long term, but under the ongoing recapitalisation, real estate investment is not admissible. So, we took the decision of selling the property and we made handsome profit from it. This has put us in a stronger financial position to scale through the exercise, while making our balance sheet stronger and healthy,” he pointed out.
Aside this, he said, there are preliminary discussion with two or three underwriting firms on consolidation to make Cornerstone brand a stronger one, post recapitalisation.
He believes consolidation makes better economic sense during recapitlIsation rather than throwing in capital, adding that, consolidation nurtures expertise, improved technical capacity aside the financial strengthening it brings to the adopting company.
He said the cornerstone Insurance came out from its loss position of N1.7billion in 2017 to N1.8billion profit in 2018, even as the 2019 profit outlook is showing sign of higher profit from that of the previous year, judging from its 2019 third quarter report.
The company, he said, is fulfilling its civic obligation of paying genuine Claims as and when due, investing in IT to give customers the best and seamless services while working towards ensuring that shareholders gets good returns on their investments.