The insurance industry post-recapitalisation is expected to be robust and capable of taking big risks, as well as contribute meaningfully to the nation’s Gross Domestic Product. Insurance Recapitalisation
; saying a process is a form of corporate re-organisation, which involves making substantial changes to a company’s capital structure.
The regulatory body had earlier ordered operators with a composite licence to upgrade their capital base from N5billion to N18billion; Life insurance firms were required to increase their minimum capital requirement from N2 billion to N8billion, amounting to 400 per cent increase. In an interview over the weekend, the Managing Director/Chief Executive Officer, Linkage Assurance Plc, Daniel Braie, told The Guardian their commitment in the industry has assured shareholders that despite the challenges posed by the impact of Covid-19, the firm is on course to meeting the recapitalization requirements.
Braie explained that the industry recapitalisation exercise, which commenced on 20th May 2019 and to end September 30th, 2021 as against recapitalization deadline earlier scheduled for December 31, 2020, requires that life companies increase their paid-up share capital from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance companies from N10 billion to N20 billion.
In 2019, the company also recorded a Profit Before Tax growth of 909 percent, moving from N135 million in 2018 to N1.36 billion during the review period. Those who cannot meet their obligations have no other option than to embrace mergers and acquisition to scale through the deadline.
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