From left: Executive Director Institutional Business, Cornerstone Insurance Plc, Chidiebere Nwokeocha; Group Managing Director/CEO, Ganiyu Musa and Group Head, Strategy, Investor Relations & ERM, Adewale Foster-Aileru at the event.
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Chuks Udo Okonta
At a time other insurance companies are still strategizing on how to meet the June 2020 recapitalisation deadline given by the National Insurance Commission (NAICOM) to all underwriting companies to upgrade their capital to the new threshold, Cornerstone Insurance Plc, seem to have successfully pooled its required capital.
Cornerstone Insurance Plc, being a composite underwriting firm, needed to upgrade its capital to N18 billion to continue to operate beyond June 2020.
The regulatory body had earlier mandated insurance companies with composite licence to upgrade their capital base from N5 billion to N18 billion; Life insurance firms were required to increase their minimum capital requirement from N2 billion to N8 billion, amounting to 400 per cent increase in their capitalisation.
Similarly, General insurance companies are to raise their capital base to N10 billion from N3 billion, even as Reinsurance Firms will now need N20 billion capital base to operate Reinsurance business in the country.
From left: Group Head, Strategy, Investor Relations & ERM, Cornerstone Insurance Plc, Adewale Foster-Aileru; GMD/CEO, Ganiyu Musa & Executive Director Institutional Business, Chidiebere Nwokeocha at the event.
The Group Managing Director/Chief Executive Officer of the firm, Ganiyu Musa, at a press conference at the company’s Head Office in Victoria Island, Lagos, yesterday, said, the company is in a comfortable financial situation to scale through the exercise, adding that, the disposal of its property along Lekki axis has further increased the liquidity of the insurance company to meet and surpass expectations.
He stated that the company would have loved to keep the property for the long run, but was challenged with the fact that real estate investment is not admissible in the ongoing recapitalisation exercise.
This, according to him, necessitated the sale of the building for an handsome amount that covers the cost of the building project and still left with profit.
“We want to hold the building for the long term, but under the ongoing recapitalisation, real estate investment is not admissible. So, we took the decision of selling the property and we made handsome profit from it. This has put us in a stronger financial position to scale through the exercise, while making our balance sheet stronger and healthy,” he posited.
Executives of Cornerstone Insurance Plc with journalists at the event.
Aside this, he said, there are preliminary discussion with two or three underwriting firms on consolidation to make Cornerstone brand a stronger one, post recapitalisation.
He believes consolidation makes better economic sense during recapitlIsation rather than throwing in capital, adding that, consolidation nurtures expertise, improved technical capacity aside the financial strengthening it brings to the adopting company.
He said cornerstone Insurance came out from its loss position of N1.7billion in 2017 to N1.8billion profit in 2018, even as the 2019 profit outlook is showing sign of higher profit from that of the previous year, judging from its 2019 third quarter report.
The company, he said, is fulfilling its civic obligation of paying genuine claims as and when due, investing in information technology to give customers the best and seamless services while working towards ensuring that shareholders gets good returns on their investments.
According to him, the fund pooled in the recapitalisation, would enable operators undertake good underwriting; make good investment; deploy robust technology and develop human capital.
