BY ROSEMARY ONUOHA

AS the December 2012 deadline given to banks to divest from all non banking activities by the Central Bank of Nigeria (CBN) gradually draws near, shareholders of quoted insurance companies have called on regulatory bodies in the financial sector to protect their interests.

The shareholders called on the CBN, Securities and Exchange Commission (SEC), as well as the National Insurance Commission (NAICOM) to give them the opportunity to take up some of the investments which the banks are divesting.

Speaking on behalf of other shareholders in Lagos, Mr. Sunny Nwosu, President of Independent Shareholders Association of Nigeria reiterated that the regulatory bodies should regularly inform shareholders on the modalities of the divestments.

According to Nwosu, opportunities should be given to shareholders to take up the divestments, adding that such divestments should be done through the capital market.

Finance Minister, Okonjo Iweala

However, it will be recalled that some foreign investors have taken up the divestments of GT Bank and Diamond Bank from GT Assurance and Adic Insurance respectively which have continued to draw the ire of stakeholders in the insurance sector.

Guaranty Trust Bank Plc (GTBank) agreed to sell its 67.68 per cent equity stake in GT Assurance valued at N11.910 billion to Assur Africa Holding (AAH), while Diamond Bank Plc said it sold its 96.15 per cent stake in Adic Insurance to NSIA Participation SA, an Ivorien firm.

Stakeholders are of the opinion that the inability of local insurance companies or shareholders to take up the divestment of banks from their insurance subsidiaries but allow foreign investors to buy up the divestment is not a positive development for the insurance industry.

Foreign prctitioners

Mr. Bayo Ajidagba of Industrial & General Insurance Plc who made this assertion noted that allowing foreign practitioners take up the divestments from banks will lead to their dominating the market and consequently create a lopsided insurance sector in favour of foreigners.

Meanwhile, Managing Director of Linkage Assurance Plc, Mr. Gus Wiggle told Vanguard that buying into any of the bank owned subsidiary is not in the strategic planning of his company.

Although he agreed that this is a good opportunity for insurance companies to take position and increase their market share, Wiggle stated that his company has no concrete plan to that effect.

In the same vein, Managing Director of Custodian & Allied Insurance Plc, Mr. Wole Oshin told Vanguard that his company has no immediate plans to take up any of the investments being divested by the banks because his company is concerned with standardizing its structures and processes.

Oshin enthused that the possibility of investing in these companies might come up in the future; “It is not a pressing need at the moment,” he stated.

Managing Director of Niger Insurance Plc, Mr. Justus Clinton Uranta, said, though the company is yet to decide on which company to buy into, it will be compelled to do so in a in a bid to increase its stake in the insurance industry.

According to him, “We are going to be compelled to buy some of these subsidiaries. If the chemistry works out well, we are going to buy one or two subsidiaries.”

The insurance companies that are affiliated to Deposit Money Banks include UBA Metropolitan Life, Union Assurance, FBN Life Assurance Limited, Fin Insurance Company Limited, Insurance PHB Limited, Guaranty Trust Assurance Plc, Oceanic Insurance Company Limited, Oceanic Life Assurance and Law Union and Rock Insurance Plc.

Others are UnityKapital Assurance Plc, Intercontinental Wapic Insurance Plc, Intercontinental Life Assurance, Zenith Life Assurance and Zenith General Insurance.