Cornerstone gets shareholders nod to acquire FIN Insurance

Cornerstone Insurance plc, one of Nigeria’s foremost insurance firms, has secured its shareholders nod to acquire FIN Insurance Company Limited, one of Nigeria’s insurance firms and a subsidiary of FCMB.

The approval came following a special business resolutions reached during Cornerstone Insurance 22^nd annual general meeting held in Lagos. The firm said in a statement that subject to the regulatory approvals: “the company be and is hereby authorised to acquire three billion, three hundred million (3,300,000,000) ordinary shares of FIN Insurance Company Limited or any part therefore held by the shareholders of the target company, which ordinary shares represent 100 percent or the corresponding percentage thereof issued share capital of the target company, in exchange for which the company will issue six billion one hundred and twelve million four hundred and twenty nine thousand and twenty six (6,112,429,926) ordinary shares of Cornerstone Insurance plc to the shareholders of the target company.”

According Adedotun Sulaiman, group chairman, Cornerstone Insurance, the company believes strongly that the insurance remains fragmented and there continues to be a need for consolidation of the Nigerian insurance industry to fast track building scale and capacity, saying “our efforts in this direction have continued through 2013, and we have identified a company with complimentary attributes and values and at this meeting therefore ask for your approval to proceed with the business combination.”

The shareholders, however, excited by the development gave their nod, authorising the board to acquire 3.3 billion ordinary shares of FIN Insurance, which will make Cornerstone 100 percent ownership.

Sulaiman said that in addition to providing a significant boost in the balance sheet size of the enlarged Cornerstone, our partner, Fin Insurance Company Limited, created complimentary values in such areas as distribution channels, geographical spread and product opportunities, among others.

Announcing the 2013 financial year result, he disclosed that Cornerstone profit before tax grew by 60 percent over the 2012 figures.

The analysis of the financial statement showed that the company grew its gross premium by 15 percent from N4.6 billion in 2012 to N5.3 billion in 2013. However, the company underwriting result dipped by 30 percent from N1.2 billion in 2012 to N866 million in 2013. This is due to a 15 percent increase in reinsurance expenses that grew from N1.6 billion in 2012 to N1.9 billion in 2013, and net claim expenses that went up by 18 percent from N985 million in 2012 to N1.1 billion in 2013.

A combination of robust investment performance and disciplined control of operating expenses resulted in an increase in profit after tax from N544 million to N870 million. On the back of this performance, Cornerstone recorded 16 percent growth in the total asset from N12 billion to N14 billion.

According to him, the company continues to make strides in the execution of its five-year strategic plan, particularly in the area of retail distribution and Islamic insurance using its Takaful window, as “we are achieving this by forming value-adding and innovative partnerships and alliances across different sectors.”

On the corporate side of our business, we will continue to make good inroads into the power and infrastructure sectors of the economy as we have seen the premium income potential in those markets, Sulaiman said.

In his comment, Ganiyu Musa, group managing director, said “Cornerstone Insurance plc will continue to build on the strength of the Cornerstone people and the commitment to her core values including strong ethics and innovation to make Cornerstone the insurance of choice in Nigeria.”

On the outlook for 2014, he said the company will continue to maintain a position that will take full advantage of the huge potential in the market with a view to increase market shares and deliver good returns on investment to the stakeholders.

Modestus Anaesoronye