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Chuks Udo Okonta
Some insurance companies had between 2013 to 2016 borrowed about N68.57 billion to support their operations, Inspenonline can report.
Data obtained from the Nigerian Insurers Association (NIA) revealed that Non life operators borrowed N60 billion, while Life operators borrowed N8.57 billion.
According to the NIA, in 2015, International Energy Insurance Plc, had a borrowing liability of N4.46 billion, while Mutual Benefits Assurance Plc, had N4.07 billion.
Others are, Custodian & Allied Insurance Plc, N2.49 billion; Equity Assurance Plc, N1.95 billion; Standard Alliance Insurance Plc, N795 million; Prestige Assurance Plc, N223 million; Industrial and General Insurance Plc, N166 million; Alliance & General Insurance Plc, N90 million; Royal Exchange General Insurance Company Limited, N56 million; Investment & Allied Insurance Plc, N4 million.
Continuing, in the life arm, AIICO Insurance Plc, N1.13 billion; Unic insurance Plc, N541 million; Alliance & General Life Assurance Plc, N303 million; Niger Insurance Plc, N278 million and Standard Alliance Life Assurance Limited, N24 million.
2016 accounts revealed that, Mutual Benefits Assurance Plc, had N6.25 billion; International Energy Insurance Plc, N4.46 billion; Equity Assurance Plc, N1.13 billion; Standard Alliance Insurance Plc, N1.26 billion; Sovereign Trust Assurance Plc, N108 million; Great Nigeria Insurance, N519 million; Prestige Assurance Plc, N152 million and Industrial and General Insurance Plc, N166 million.
In the life arm, AIICO Insurance had, N1.78 billion; Niger Insurance Plc, N400 million; Alliance & General Life Assurance Plc, N303 million and Unic Insurance Plc, N267 million.
AIICO Insurance said its shareholders had, at the Annual General Meeting (AGM), held on June 27, 2012 passed a resolution authorising the directors, subject to approval of the appropriate regulatory authorities to raise additional capital up to the sum of N8 billion, whether locally or internationally, through the issuance of convertible or non-convertible loan or debenture stock.
“At the 42nd Annual General Meeting (AGM)at Transcorp Hilton Hotel, Abuja, on Wednesday June 27, 2012 at 10 am, the shareholders passed the resolution: That the Directors be and are hereby authorised, subject to the approval of the appropriate regulatory authorities, to raise additional capital up yo the sum of N8 billion, whether locally and internationally through the issuance of convertible or non-convertible loan or debenture stock, medium term notes and/or any other instrument, by way of offer for sale or offer for subscription through public or private equity placement, in tranches, series or proportions at such coupon or interest rates within such maturity period, and such terms and conditions, or in any other manner which the directors of the company deem fit and expedient, and to any prospective investor (s) including, but not limited to International Finance Corporation (IFC).
“That the directors be and are hereby authorised to take all such incidental, consequential and supplemental actions necessary and expedient in order to execute documents as may be necessary in order to give effect to the above resolution.
AIICO maintained that the loan was subsequently executed on December 23, 2014 and that IFC disbursed it in June 2015, adding that is was recognised in its books and also subsequently re measured as the Naira depreciated against the United States Dollar at The Central Bank of Nigeria (CBN) official rate.
According to the firm, the debt which was obtained at an exchange N199 to a Dollar in June 2015, amounting to N1.07 billion, has due push in Exchange rate to N305 to a Dollar in December 2016, moved to N1.78 billion.
The report also revealed that firms such as Leadway Assurance Limited; NEM Insurance Plc; Zenith Insurance Limited; Axa Mansard Insurance Plc; FBNInsurance amongst others did not borrow within the period.
The Deputy Commissioner, Technical, National Insurance Commission, Thomas Sunday, said firms are allowed to borrow, provided the funds are put in good use.
He noted that NAICOM will continue to monitor loan portfolio of insurance firms to ensure they did not jeopardize policyholders trust.
Managing Director Lancelot Ventures Limited, Adebayo Adeleke, who is also a prominent member of Independent Shareholders Association of Nigeria (ISAN), said companies across the globe borrow, but the reason for borrowing should be clear and the funds put in proper use.
Shareholders Activist & Co-Founder, Nigeria Shareholders Solidarity Association (NSSA), Alhaji Gbadebo Olatokunbo, said insurance firms can borrow for investment, but not to run overheads and settle claims.
According him, insurance firms, especially life operators should be in position to lend due to the pool of life funds in their custody.
