Insurance World

Universal Insurance Board Gets Shareholders Nod To Shore-Up Capital * As Coy Set Plan To Retain Universal Brand Beyond 2020

BY NKECHI NAECHE-ESEZOBOR-—Shareholders of Universal Insurance Plc on Tuesday unanimously gave the board of directors of the company approval to take all necessary steps to shore up its capital to meet the new capital requirements set by the National Insurance Commission (NAICOM).
The shareholders gave the approval during its joint 48th and 49th annual general meeting held in Ikeja. 
The board had sought and obtained the shareholders’ approval to raise the company’s capital through right issues, share reconstruction, to raise additional equity capital for the company up to the maximum limit of the authorised share capital, whether by way of special placement or public officer with or without a preferential allotment/or rights issue or a combination of any of them, either locally or internationally and upon such terms and conditions as the directors may deem fit in the interest of the company and subject to the approval of the regulatory authorities,”
“That in the event of over subscription of the offer/issue to capitalize the excess money and allot additional shares to the extent that can be accommodated by the company’s unissued share capital subject to the approval of the regulatory authorities and that the proceeds should be used for the same purpose as the offer/issue.”
According to Anthony Okocha, the Acting Board Chairman of the company, Universal Insurance Plc has over 30 billion registered shares and out of which,16 billion has been issued while 14 billion is still warehoused and could be brought up for issuance if need be.
The Acting Chairman disclosed that the company has in its kitty, N6.5 billion and would need N3.5 billion to make up for recapitalisation requirement as a general business insurer.
On steps to meet up with the exercise and beat the June 30 2020 deadline, Okocha stated: “More discussion is ongoing but could not be discussed prematurely. We are also looking at Right Issues, the company is in discussion with core investors and probable foreign influence into your company.”
On financials, he said: “Notwithstanding the shape and colour of the global economy in 2018 and its effect on the macroeconomic landscape in Nigeria, your company recorded about 45 per cent increase in Gross Written Premium (GWP) from N753 million in 2017 to N1.689 billion in 2018. Claims expense decreased from N463 million in 2017 to N263 million in 2018.
However our underwriting expense rose from N166million in 2017 to N452 million in 2018.”
Okocha said it is the intention of the board and management to intensify the corporate strategy in order “to identify the needs of potential customers, their behavior and culture and have an attentive ear to market-feedback so to create products that will address them.
He disclosed that the company would continually invest in information technology so as to create an insurance driven by technology (INSURETECH) that will not only deliver services real-time and in seamless manner but will also deliver on the numbers, adding that the Universal brand has stood the test of time and the values created over the years are embedded in the loyalty and commitment the firm has enjoyed from all stakeholders.
“We intend to keep this Universal Insurance Plc as a legacy for several generations to come. We are sincerely grateful to our treasured customers, brokers, agents and other stakeholders who have objectively trusted in the universal advantage over the years.” He said.
Speaking further on its financial, Ben Ujoatuonu, the Managing Director and Chief Executive of the company craved the indulgence of the shareholders to approve that they, the board and management, go out there and raise the required funds so as to retain the company’s brand.
They have approved right issue, merger and acquisition or foreign investors.
“We are having talks with foreign investors and also looking at merger and acquisition. “If you look at our balance sheet as at 2018 and going by NAICOM definition of minimum capital requirement for insurance company we have about N6.4billion  and a negative of N3.6billion in line with  that we are looking at a business combination that will meet the demand of the shareholders that they want the brand universal insurance to remain beyond 2020.
“We are also mindful that the fact that attracting foreign investors takes sometime given the timeline that NAICOM has given that activity may not be concluded within that time  but we are not foreclosing  it because we are going to look at the advantages that comes with it after we have met the deadline. We still continue the discussion with them to ensure we increase our capacity in terms of capital and branding.


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