Equity Assurance strengthens financial position with N2.6 billion cash injection

Equity Assurance Plc is in a growth spurt as fresh cash capital injection of N2.6 billion from Sunu Assurances Group (SUNU), a Franco-phone African Insurance Group has strengthened the Nigeria insurer’s financial position amid unpredictable macroeconomic environment.

The organic growth strategy pursued by the company will enable it compete favourably with its peers, while delivering greater value to customers and shareholders.

As a result of the aforementioned cash injections, Equity Assurance share capital has increased by 59.09 percent to N7 billion from N4.4 billion previously held.

“With the new investment, the company has exceeded the minimum solvency requirement of N3 billion and is better positioned with increased capacity to assume more risks and better our service in terms of effective claims payment,” said the company in a statement to BusinessDay.

Analysts say these focus and market penetration strategies will make Equity Assurance shares attractive to investors and it will also maximize the value of the firm.

“Certainly the synergy with Sunu’s technical expertise across the Africa continent will further enhance our existing management competences to serve you better in the years ahead,” said the Company.

SUNU is a Franco-phone African Insurance group currently present in 11 Franco-phone countries.

With the development therefore, Equity Assurance plc is now a member of a large Insurance Conglomerate (now in 14 Franco-phone countries) with an enviable, reputable track record which is anchored on a strong financial/asset base.

Investors can swoop on the shares of the Nigeria insurer given its strong balance sheet and impressive financial performance in the third quarter of 2015.

For the first nine months through September 2015, Equity Assurance had a combined ratio (CR) of 56.55 percent. A CR lower than the 100 percent threshold means an insurance company has strong financial strength.

An industry analyst who doesn’t want his name mentioned told BusinessDay that Equity Assurance should brace for a tough 2016 given the economic doldrums stoked by a fall in oil price by more than 70 percent to $33.

Nigeria inflation increased advanced to 9.4 percent in November after a brief respite in previous month on the account of increased costs.
Economic growth rate slowed to 2.4 percent Q2 of 2015, with a marginal increase to 2.84 percent in Q3 of 2015 compared to nearly 4.0 percent in the first quarter of 2015, and 6.2 percent in the fourth quarter of 2014, according the NBS data.

 

BALA AUGIE