Prestige Assurance urges investors to take advantage of N6.82b rights issue
L-R: Raja Vadlamudi,Executive Director, Prestige Assurance Plc; Sir.Muftau Oyegunle,Non-Executive Director; Mr. Sarbeswar Sahoo,Managing Director at the shareholders’ forum on the company on- going rights issue held on Wednesday at Radisson Blu Hotel, V/Island. Lagos.
Prestige Assurance Plc, one of the oldest insurance companies in Nigeria has called on investors to take advantage of its ongoing N6.82 billion Rights Issue to invest in the company even as it encouraged existing shareholders of the company to increase their right in the company by taking more shares.
The Chairman of the Company’s Board of Directors, Dr. Adedoyin Salami, made the call at the company’s Investors Forum in Lagos recently.
He said the rights issue was in compliance with a new recapitalization and increased minimum capital requirement for all insurance companies in Nigeria across the various categories as mandated by National Insurance Commission (NAICOM) via its circular of May 2019.
The Circular mandated that General Insurance Business should have a minimum paid up capital of N10 billion by September 30, 2021.
The Chairman said “in line with the above, Prestige Assurance Plc, having a current admissible issued and paid up capital of about N3.8 billion (as defined by NAICOM), embarked on a recapitalization exercise to raise N6.8 billion via Rights Issue to meet up with the new industry requirement.
“The recapitalization directive of NAICOM ties with the strategic plans of our Company to continue on its growth trend which it has maintained over the recent past. Our Gross Premium Written (GPW) grew by 152% between 2015 and 2019, which has culminated in growth in the Premium Income and Net Income earned by the Company.
“The proceeds of this Rights Issue will be deployed to strategic initiatives that will expand the Company’s business through increase in underwriting capacity, expansion of branch network, investment in new technology as drivers of insurance business, and engagement in keen research and development for new products relevant to the market.
He said the company, with shareholder’s fund in excess of N8.4 Billion as at December 31, 2019, has remained a reputable insurer in the nation’s landscape and has maintained its pedigree of performance even under the most difficult circumstances, adding that the firm’s plan is to build on this track record and then leapfrog into even greater growth and performance.
Dr. Salami noted that insurance industry is fast evolving on global scale as well as nationally and regionally (within our home continent of Africa), adding that “this evolution has necessitated the need for our Company to begin to execute strategies that will enable us achieve our ambition of being a leading player in our industry, attaining a top 5 position in the industry over the medium term period.”
In his Introductory Remarks, the Managing Director of the firm, Mr. Sarbeswar Sahoo, said Prestige Assurance Plc has continued to improve in all its business operations.
He said in the 2019 financial year, the company recorded a growth of 27.88% in its Gross Premium Written; a 13.56% growth in Net Underwriting Profit and a 1.9% growth in Net Profit from N0.423 billion in 2018 to N0.431 billion in 2019.
According to him, “We have also improved efficiency in the company’s operations as our expense ratio has declined by 56% between 2015 and 2019 with our claims ratio significantly declined by 40% within the same period.
“While we have recorded growth in our business operations, we have also not failed to ensure that returns are fairly delivered to you, our esteemed shareholders. In recent times, we have delivered value to you our shareholders in forms of dividends declaration and bonus issues.
“Most recently in 2018, we declared dividends to our Shareholders and in 2019, we declared bonus issues to our Shareholders. It is our intention to improve the trend of value delivery to our Shareholders and we believe that this Rights Issue exercise will better position us for maximum value delivery.
“As we aim at being the preferred and most reliable risk carrier in Nigeria’s insurance industry, we have developed medium term plans which will further strengthen the company’s operations and improve its ranking in the insurance industry. To this end, we will invest portions of the proceeds of this Rights Issue into outlays such as upgrade of ICT Infrastructure for operations and E-business, Human Capital Development, Retail and Branch expansion amongst others.”
He enjoined the shareholders and investors to actively participate in the Rights Issue Exercise by subscribing to the Rights issue to enable the company have a successful market outing and improve its value delivery to its shareholders.
Application list for the rights issue opened on Monday, August 10 and will close on Thursday, September 17.
