Wapic Insurance Plc has secured the approval of its shareholders to increase the authorised share capital of the company from N8.5 billion to N15 billion, by the creation of 13 billion additional ordinary shares of 50 kobo each.
The National Insurance Commission (NAICOM), had on May 20, given insurance companies a 13-month ultimatum to recapitalise or lose their licences.
The ultimatum raised the minimum paid-up share capital of a Life insurance company from N2 billion to N8 billion; Non-Life insurance from N3 billion to N10 billion and composite insurance from N5 billion to N18 billion. Re-insurance companies were directed to raise capital base from N10 billion to N20 billion.
Wapic operates a General Insurance Business as well as a Life Business, and would require a minimum paid up share capital of N10 billion for general, and N8 billion for life ahead of the deadline.
The resolution approval, according to its Chairman, Aigboje Aig-Imoukhuede, is in the best interest of shareholders, as it will enable the underwriter to accommodate any share capital increase.
Aig-Imoukhuede, who spoke at the company’s Yearly General Meeting, said the board is ready to ensure that Wapic meets the capital requirement, adding that the company will emerge stronger by the end of the recapitalisation exercise.
He lauded NAICOM on the capital base increase, stressing that insurance business requires funding to attract the right talent, build skills and grow the business.
During the financial year ended, December 31, 2018, Wapic posted a gross written premium (GWP) of N13.9 billion, a 42 per cent increase from N9.81 billion in 2017.
The chairman explained that the performance was buoyed by the attainment of leadership status in some major accounts, and enhanced underwriting capabilities.
He said: “The group achieved an underwriting profit of N2.2 billion, a 40 per cent growth from N1.54 billion achieved in 2017. Accordingly, the group experienced an 88 per cent decline in profit before tax (PBT) to close at N187 million, negatively impacted by the drop in investment and other income, and the growth in underwriting and operating expenses for the period. Profit after tax during the review year is N351.2 million.
“The company paid claims of over N4.96 billion, a 30 per cent increase from N3.82 billion paid out in 2017, underscoring the importance it attaches to its customers towards meeting their claims obligation.”
The Managing Director, Yinka Adekoya, who spoke to The Guardian shortly after the meeting, said Wapic plans to scale its drive for business excellence through sustainable practices, motivated by its commitment to customer satisfaction.
“While we are hopeful about our future, we are very conscious of the realities of geopolitical and economic volatility, regulatory challenges, foreign currency pressure and customer needs and consumption pattern.”