Business
Insurance Operators Decry Poor Industry Returns
The insurance sector of the nation’s economy has been described as performing below its potentials as the companies in the sector released the financial results to the public.
According to capital market operators the sector has not lived up to expectation despite high hopes by the shareholders during the recapitalisation exercise in the industry.
However, they believe that the sector still has more to offer as it is still performing below its potential on the Exchange in terms of capital appreciation and returns on investment to its shareholders.
Yomi Osunrinde, the General Manager of Integrated Trust and Investment Limited, stated that the poor performance of insurance companies is a reflection of what is happening in the economy.
Osunnde added that the global economic meltdown seriously affected the sector. He pointed out that the consciousness level of insurance in the country is still low, stating that by the time the need for insurance is made compulsory by the government the level of their profitability will go up and they will be able to generate a lot of income. He foresees bright prospect in the industry in the nearest future.
Also speaking, the Managing Director of Laksworth Investment & Securities Limited, Mr. Kayode Awotite, noted that insurance services cannot be likened to that of the banks.
Awotite agreed with Osunnde’s view that insurance companies should embark on enlightenment campaign to change the age-long perception that insurance companies find it difficult to remit premium as and at when due.
However, Mr. Emma Eze, a broker with DBSL Securities Limited, described insurance stock as penny stocks which are associated with low dividend payout.
He noted that all of them are kin a stable colum because their dividend and bonus is constant even though it may not be impressive.
Recently, Regency Alliance and Staco Insurance Plc released their audited results ended December 31, 2008.
Regency Alliance posted a turnover of N1.71 billion as against N1.21 billion representing an increase of 40.91%. the company’s profit after tax stood at N312.06 million compared to N237.54 million in 2007.
While Staco Insurance’s result showed a turnover of N4.38 billion as against N2.82 billion; its profit after tax was N543.42 million, down fromN758.01 million in 2007, indicating 28.44% drop.
Board of directors of both companies recommended a dividend of N0.02 and a bonus scrip issue of new share for every 10 shares held by shareholders.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.