Insurers Mount Campaign For Investors' Support
 On Insurance Stocks
By Jushua Nse
 9th OCT 2006

AS the deadline of February 28th, 2007 for the re-capitalisation and consolidation in the insurance industry closes in, stakeholders in the industry have sustained campaign for the support of investors in order to meet the new minimum capital base requirements for the insurance industry.

In the past couple of weeks, directors and chief executives of a number of insurance companies played host to stockbrokers, corporate and high network investors to market their shares and solicit support for investment in the industry.

At the investor's forum organised by the insurance companies, operators beaming with confidence assured investors that there would be good returns on their investments as insurance stocks would be the most profitable outlet investors could buy.

They are quick to pinpoint the new government policy on oil and gas where government is trying to ensure that localisation takes effect in that sector for which insurance sub-sector would be part of it.

Some of the insurance companies that have floated both public offer/rights issue to raise funds from the capital market include: Crusader Insurance (Nigeria) Plc shopping for N3.2 billion; Law Union Rock offer of N1.98 billion; Mutual Benefits Assurance N2.4 billion offer; UNIC Insurance offer of N2.2 billion; Prestige Assurance N1.7 billion offer; NEM Insurance N1.942 billion offer, among others.

Addressing investors in one of the gatherings in Lagos recently, the Managing Director/Chief Executive Officer, Law Union & Rock Insurance Plc, Mr. Olumide Falohun said: "We are here to talk to our friends on what Law Union & Rock is doing with regard to the recapitalisation and consolidation in the insurance industry, and our shares that have been out on offer for which we have got very good response from the public. We want our friends - members of the Lagos Lawn Tennis Club to also take advantage of that offer, which is doing very well."

"As a matter of fact, we can say that we would be increasing our level of participation and position in the market, which has been growing tremendously. We want to say that our share of the market would surely increase. Within the next 12 months, there will be a big leap forward. Don't forget that the unique selling points for Law Union & Rock is our pedigree. This is an old company, 55 years old, very well tested and we have done very well in this country, in this market and also we are working with a good co-investor with a lot of possibilities - a co-investor with over 200 branches nationwide, this is quire a unique selling point, one of our critical success factors," he said.

The Managing Director/Chief Executive Officer, Crusader Insurance (Nigeria) Plc, Mr. Gabriel Oyelami said: "As investors took to maximise returns on their investment, it is important that they adopt certifiable facts and figures as against sentiments. Our company has consistently turned out indices that should catch the attention of the investors. Take for instance, the performance of year 2005, the stock opened at 70 kobo in January 2005 and closed at N1.42 at the end of business in December, a performance that bettered the best stocks in the Exchange in 2005.

This represents a return on investment of over 100 per cent. An investors' value would simply have doubled. This performance didn't just by far beat the performance for other companies within the industry, it ranked among the overall top stocks of year 2005."

Assuring investors of good performance in the coming year, Oyelami said, "over the past 50 years, Crusader Insurance management in concert with the board of the company has vested interest in seeing the company projected with high level of ethics and professionalism. As a result, the company has from inception practised strict prudential policy that safeguards both the brand reputation and investors' funds."
"Besides, the company has built a reputation, which leverages this policy and shields investors from any unpleasant surprises. In addition, the prudential practices of the company keeps it above board with regulatory compliance, as details of all transactional impacts are open to public scrutiny. This way, investors' confidence always approximates the true reality of Crusader Insurance business performance."

Also, the Managing Director/Chief Executive Officer, Continental Reinsurance Plc, Mr. Adeyemo Adejumo told institutional and high net worth investors to invest in the stocks of the company and insurance companies generally as there were a lot of potentials and good returns on investment after the recapitalisation exercise in the country.

He said: "You are aware that the main source of income for the Nigerian economy is oil and gas and a lot of activities are going on in the oil and gas sector. The Federal Government is trying to ensure that localisation takes effect in the oil and gas sector for which insurance would not be an exception.

"We believe that our company's recapitalisation would definitely assist in achieving the government's objectives of localisation policy as a lot of risks and foreign exchange hitherto taken off-shore would be retained in Nigeria."

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