Consolidated Hallmark Insurance has announced its plans to grow its capital base from N6.1 billion to N10 billion ahead of the deadline stipulated by the National Insurance Commission for recapitalisation of insurance companies.
In a statement, sourced from the Nigerian Stock Exchange, the firm which revealed that it would issue additional shares by way of rights issue as its first line of action to get additional N3.9 billion to meet the new capital requirement, the company said it was crucial to share its plans with shareholders and stakeholders to get their support to realise the new target.
According to the underwriting firm, the rights issue would give existing shareholders the opportunity to increase their stakes in the company and take the benefit of a lower offer price compared to that of a public offer.
The statement said, “The company, in the recent past, made a number of positive strides, some of which are worth mentioning. The company recorded 19 per cent growth in its gross premium income in 2018 and a 30 per cent growth in income line from the retail segment of its portfolio as a result of the implementation of its retail expansion strategy.
“The additional capital will not only enable the company meet the regulatory requirement, but also deploy same to specific initiatives to help to accelerate growth and consolidate its leadership position in the industry while delivering exceptional returns to shareholders.”
Consolidated Hallmark further disclosed that other options available to the company to achieve the additional capital required were private placement, public offer or merger and acquisition. It stated that the management and board were working unflaggingly to meet up with the recapitalisation directive and any definite decisions to implement any of the options viable to the company would be communicated in due course.
NAICOM recently increased the minimum paid-up share capital of all classes of insurance business, with the exception of Takaful operators and micro-insurance companies.The minimum capital base of life insurance companies was reviewed from N2 billion to N8 billion while that of general insurance companies was reviewed from N3 billion to N10 billion and composite businesses was reviewed from N5 billion to N10 billion and that of reinsurance business was reviewed from N10 billion to N20 billion respectively.