Insurance shareholders have called for increased penetration, improved dividends, stronger corporate governance cand enhanced regulatory supervision following the sector’s recapitalisation.
The shareholder associations made the call in separate interviews with the News Agency of Nigeria (NAN) on Sunday.
They said the fresh capital injected into insurance companies should translate into stronger business performance, better investor returns and greater economic contribution.
NAN reports that 50 insurance and reinsurance companies met the new minimum capital requirements following the recapitalisation exercise.
The requirements are N10 billion for life insurers, N15 billion for non-life insurers, N25 billion for composite insurers and N35 billion for reinsurers.
Mr Moses Igbrude, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), said insurance penetration should rise significantly from its current one per cent.
Igbrude urged insurers to leverage their stronger capital base to expand underwriting capacity, develop products and reach more Nigerians outside the formal insurance market.
He also said shareholders expected improved returns on their investments, stressing that the era of token dividends should end.
“In terms of operation, let us see insurance penetration in the country increase from the current level of one per cent.
“Within the next three, four or five years, we should see a significant improvement so that the money given to them will reflect in operations,” he said.
Igbrude said increased business and insurance penetration would generate more revenue for insurers, resulting in improved profitability and stronger shareholder returns.
“If they do more business and increase insurance penetration, it means there will be more money in their kitty, leading to better profitability and returns.
“It should never be the same again. We need an era where shareholders receive meaningful dividends. The era of kobo-kobo dividends should go,” he said.
He said insurers could no longer justify poor returns because their stronger capital positions should enable them to expand operations and generate better earnings.
Igbrude said increased shareholders’ funds and capitalisation had raised investor expectations, making stronger financial performance imperative for insurance companies.
He also urged the National Insurance Commission (NAICOM) to intensify supervision of the industry following the completion of recapitalisation.
According to him, stronger capitalisation would expand insurers’ operations, requiring closer regulatory monitoring to ensure companies were properly managed.
“NAICOM needs to do more work. More money and more volume of business mean that there should be more supervision.
“Corporate governance must be enhanced. We must integrate everybody and ensure that the business is run according to the ethics of the industry,” he said.
Igbrude also called for closer collaboration among insurance operators, employees and other stakeholders to strengthen the industry and increase its contribution to Nigeria’s Gross Domestic Product.
Similarly, Mr Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria (PSAN), urged regulators and operators to prioritise shareholder protection.
Okezie said stronger protection was necessary to restore investor confidence and attract more capital into the insurance market.
He said poor dividend records had discouraged some shareholders from investing in insurance stocks, while some investors had funds trapped in companies that ceased operations.
According to him, some shareholders invested during previous recapitalisation exercises but had yet to receive dividends from their investments.
Okezie, however, called for stronger measures to protect shareholders and ensure recapitalisation benefits extended beyond strengthening insurers’ balance sheets.
He said the exercise should ultimately produce improved business performance, higher dividends, stronger share prices and increased confidence in insurance stocks.
