Adeleke
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Chuks Udo Okonta
An investor and Managing Director Lancelot Ventures Limited, Adebayo Adeleke, has said insurance and reinsurance companies have no excuse for not recapitalising going by the leverage provided by the National Insurance Commission (NAICOM).
Adeleke who is a major player in stock market and real estate business, told Inspenonline that though COVID-19 disrupted business plans across the globe, it is not enough reason why insurance and reinsurance firms should not recapitalise as they have been given enough time by their regulator to pursue the recapitalisation plan.
He applauded NAICOM for the segmentation of the recapitalisation exercise, stressing that the decision would help keep operators on their toes.
“I believe the regulator took the step to ensure underwriters do not rest on their oars, the decision is a step in the right direction. Any management and board that is serious, should use the remaining months in this year to raise the required capital for this year and use the remaining months in 2021 to conclude merger terms, acquisition and the rest,” he said.
He urged operators to explore the wisdom of merger and acquisitions, adding that operators who have in-house signals showing that they would not meet the requirements, should quickly turn their direction to merger and acquisition as last minute rush may lead them into what they never anticipate, as seen in the last banking recapitalisation.
“Insurers have enough time to consider embracing the window of merger and acquisition. Irrespective of what the economy and pandemic are saying, operators should brace-up, re-think their strategy, refocus their plans and hit the ground running,” he added.
He noted that the pandemic would not be the major disruption in the recapitalisation as the exercise has been on since last year, and that by now certain cause of action should have been put on ground by any serious and forward looking underwriting company.
“I do not see any serious minded insurance or reinsurance company that want to remain afloat leaving things to degenerate till now and begin to use the pandemic as an excuse for not meeting the recapitalisation deadline,” he opined.
NAICOM had extended and segment the recapitalisation process into two phases which allowed 50 per cent of the minimum paid-up capital for insurance and 60 per cent for reinsurance to be met by December 31, 2020, while the operators are to fully comply with the approved minimum paid-up not later than September 30, 2021.
According to NAICOM, insurance and reinsurance companies that failed to satisfy the required minimum paid-up capital by the end of December 31, 2020 may be restricted on the scope of business they will transact.
The Commission has charged insurance and reinsurance firms to ensure they fully comply with the approved minimum paid-up capital by September 30, 2021.
