NEM Insurance Plc has concluded arrangement to conclude the second phase of the recapitalisation exercise as mandated by the National Insurance Commission, NAICOM.
The Chairman of NEM Insurance, Dr. Fidelis Ayebae disclosed this at the Company’s 51st Annual General Meeting, AGM held in Lagos.
He said: “As at the end of the reporting period we have recapitalized up to N5.016 billion, bonus shares were issued to existing shareholders in proportion of 9 for 10, this was approved at the Extra Ordinary General Meeting, EGM in 2020.
It should be noted that before the end of year 2021 we shall conclude the second phase of the recapitalization to meet up with the NAICOM requirement of N10 billion in the (General Business) category.”
While commenting on the financial performance for the year under review, Ayabae said : “Despite the challenges faced by the insurance industry regarding total lockdown of the economy, destruction by ENDSARS protests among others in the financial year 2020, NEM Insurance Plc gross claim went up by 15 per cent to N8.4 billion as against N7.3 billion recorded in 2019.”
Meanwhile, NEM Insurance board of directors recommended a dividend of 9 kobo per ordinary share, which was endorsed by shareholders at the 51st Annual General Meeting, AGM held in Lagos.
The Company’s other financial indicators show major growth as gross premium of N22 billion was generated as against N19.8 billion generated in the preceding year 2019, an increase of 12 per cent.
The net premium earned during the period under review was N15.8 billion and 25 per cent increase over the preceding period of 2019 which recorded N12.6 billion.
Commenting at the AGM, Chairman, NEM Insurance, Ayebae, who was elated for the impressive performance said group’s Profit After Tax, PAT for the preceding period was N2.4 billion, the sum of N5.08billion was recorded in the reporting period; an increase of 112 per cent.
He said: Though the interest rate in commercial paper crashed, the company’s management was proactive enough take the advantage of other investment opportunities to generate an income on investment of N1.004billion as against the previous income on investment in 2019 which was N878.2 million.
This resulted in increase of about 14.3 per cent. In the same vein, the net claims expenses of N6.05 billion incurred in 2020 was 53 per cent higher than that of the preceding period which recorded N3.9 billion. The net claims ratio for the period under review was 27 per cent as against that of 2019 that was 21 per cent.
Commenting on the future, the chairman said: “As situation continues to be very dynamic, the Company has been working diligently to assess the potential risks posed by COVID-19 to its business on an ongoing basis and to realign its strategies accordingly. We are of the opinion that our business operations will not be negatively affected by COVID 19 pandemic.
The Company remains well positioned and its business strong given the unprecedented circumstances and current market environment. The Company has adopted policies which are prudent at this time to grow its market share by leveraging extensively on its robust technology infrastructure and maintain a healthy balance sheet.”
Also addressing the shareholders, Group Managing Director, Tope Smart said: “Despite this difficult terrain, our company showed resilience and we were able to post impressive results.
With regard to the issue of recapitalization, “he said : “ the National Insurance Commission (NAICOM) having looked at the impact of COVID-19 on the recapitalization of Insurance Industry decided to break the exercise into two phases.
Insurance companies were required to meet up with 50 per cent of their required capital by 31st December, 2020 while full compliance was scheduled to be attained by 30th September, 2021.
We met the first phase by capitalizing our share premium and part of our retained earnings to bring our Paid-Up Capital to N5,016,477,000.
This was achieved through the issuance of bonus shares to all existing shareholders as at middle of December. Suffice to say that the recapitalization exercise has now been suspended as a result of court injunction.”
He commended shareholders and other stakeholders for their support and loyalty to achieving this milestone .