From Edet Udoh, Lagos
The Managing Director/Chief Executive Officer, Cornerstone Insurance Plc, Mr. Ganiyu Musa, has expressed confident that the company is financially strong to scale through the ongoing recapitalization exercise.
He said at a time other insurance companies were still strategizing on how to meet the June 2020 recapitalisation deadline given by the National Insurance Commission (NAICOM) to all underwriting companies to upgrade their capital to the new threshold, Cornerstone Insurance Plc, has successfully pooled its required capital.
Cornerstone Insurance Plc, being a composite underwriting firm, needed to upgrade its capital to N18 billion to continue to operate beyond June 2020.
Musa, at a press conference at the company’s Head Office in Lagos, said the company is in a comfortable financial situation to scale through the exercise, adding that, the disposal of its property along Lekki axis has further increased the liquidity of the insurance company to meet and surpass expectations.
He stated that the company would have loved to keep the property for the long run, but was challenged with the fact that real estate investment is not admissible in the ongoing recapitalisation exercise.
This, according to him, necessitated the sale of the building for an handsome amount that covers the cost of the building project and still left with profit.
“We want to hold the building for the long term, but under the ongoing recapitalisation, real estate investment is not admissible. So, we took the decision of selling the property and we made handsome profit from it. This has put us in a stronger financial position to scale through the exercise, while making our balance sheet stronger and healthy,” he posited.
Recall that the NAICOM had earlier mandated insurance companies with composite licence to upgrade their capital base from N5 billion to N18 billion; Life insurance firms were required to increase their minimum capital requirement from N2 billion to N8 billion, amounting to 400 per cent increase in their capitalisation.
Similarly, General insurance companies are to raise their capital base to N10 billion from N3 billion, even as Reinsurance Firms will now need N20 billion capital base to operate Reinsurance business in the country.