By Peter Egwuatu
Cornerstone Insurance Plc has indicted insurance brokers for hijacking most of the businesses without remitting the fund due to insurance companies.
To this extent, he disclosed that Cornerstone Insurance has disengaged the use of brokers and advised its clients to deal directly with the company.
Speaking at the17th Annual General Meeting (AGM) in Lagos, Wednesday, Chairman of Cornerstone Insurance Plc, Mr. Adedotun Suleiman said, â€œ Most brokers collect business for on behalf of insurance companies and do not remit the money as at when due.Â About 80 per cent of the insurance premium are collected by brokers. So we have discovered this and have stopped using brokers. It is very unfortunate that we are operating in an environment that cannot operate without bribeâ€
He further lamented on the poor patronage of insurance business by Nigerians , saying â€œ Only two per cent of the population in Nigeria have one insurance policy or the other. It is only in vehicle insurance that we have people who patronises it simply because they donâ€™t want embarrassment from the law enforcement agencies. In fact, 90 per cent of the insurance cover are from commercial institutions while many Nigerians shy away from insurance policy .â€
While explaining reasons for the dismal performance of the company in the financial year ended December 31, 2008, he said that most expenses was incurred as a result of the repositioning strategy aimed at transforming the company.
According to him â€œ The rebranding we did last year affected the management expenses. Management expenses also went up because of ourÂ movement to a new head office.
This expenses are just one off and we hope the worst period is all over but we should not expect to get those high figures we had two or three years ago. What I know is that the market would be moderate .The market has bottom out and we would begin to see moderate performance.â€
Suleiman assured shareholders that management will do everything possible to reward them in nearest future. â€œ We are making effort to recover our debts. There is no doubtful debt in our bookâ€ he added.
On the position of appointing a substantive managing director for Cornerstone Insurance, he disclosed that the company has been searching for credible and experience person but has not been able.
According to him, â€œ Let me assure shareholders that we are doing every thing possible to get a permanent managing director. We did get two people who had shown interest for the job but when we engage them on what we expect from them they will turndown the offer. So we will keep searching until we get the best.â€He debunked rumour that he is an executive chairman, saying, â€œ I am not an executive chairman but an active chairman. I will never be an executive chairman because I have a lot of other commitment elsewhere.
The company recorded an increase in gross premium from N2.775 billion in 2007 to N3.812 billion in 2008. Total Asset decreased from N8.9 billion in 2007 to N8.4 billion in 2008 while the shareholdersâ€™ funds dropped by 12 per cent to N5.9 billion from 6.6 billion because of provision for potential loss in the market value of its investments amounting to N1.3 billion.
Cornerstone recorded loss before and after tax of N432.4 million and N419.460 million respectively for the year under review.