BusinessDay

Insurance industry stakeholders kick against unclaimed dividends diversion

...as firm posts N570,363m profit after tax

Stakeholders in the Insurance industry, on Thursday, cautioned against diverting unclaimed dividends, adding that such funds be “ reinvested into firms to strengthen their operations”.

The government had on the back drop of dwindling revenue planned to borrow part of the over N170b funds.

These views were aggregated on in Abuja at the Annual General Meeting of Veritas Kapital Assurance Plc, where shareholders were informed that payment of claims by the company was in the threshold of over half a billion naira as at June 2022.

The stakeholders noted that the funds belonging to shareholders of several blue-chip firms, including insurance sector investors be reinvested and re-channelled to the affected firms for reinvestment.
Dividends are the distributable earnings of a company, which are determined by its board of directors. When the shareholder for any reason does not claim a dividend, it is termed unclaimed dividends.

The insurance sector stakeholders argued that government as regulators had no business in setting up a trust fund where those unclaimed dividends will be channelled to because most of the key players are private entities.

It was reliably gathered that some key players in the insurance industry have dragged the Federal Government to court over the issue.

They alleged that government is mulling a trust fund, where it hopes to channel all dividends left unclaimed by investors.

They equally lamented the level of skepticism among citizens regarding insurance matters, insisting that it is one area where government should be more proactive, especially in strengthening enlightenment to help minimize risks associated with loses among the populace.

At the Annual General Meeting of Veritas Kapital Assurance Plc, the Directors announced a profit after tax of N570,363million for the 2021 fiscal year which ended December 31st.

Commenting on the dividend claims, the national chairman, new dimension shareholders association of Nigeria, Patrick Ajudua, a shareholder with the company said, “I am the we talked about the unclaimed dividend because its money meant for investors in the capital market, as such government has no reason to lay claim, that money doesn’t belong to them by setting up a trust fund.

Read also: ‘Insurance practitioners need to open up the market’

“We believe that unclaimed dividends, if not claimed should be sent back to the companies for reinvestment and a return back to the shareholders. So government has no business claiming it, that money doesn’t belong to them”.

Also commenting on how insurance business in Nigeria can thrive, Ajudua said building trust was necessary to boost the sector.

According to him, “For insurance business in Nigeria, the first key thing is trust and I said it, once trust can be guranteed, the people know that if I pay premium my claims will be settled.

He declared that people will patronize insurance business, if more awareness is created, so that the people will know the benefit for them.

“ We have been having building collapse in Nigeria, people die and there is no insurance on that, who is the ultimate loser, the regulators must ensure they create more awareness for insurance firms in Nigeria”.

Earlier, MD/CEO of the insurance firm, Kenneth Egbaran, corroborated some of the shareholders, saying there was need for robust enlightenment campaign.

He stressed that while insurance companies continues to create awareness, the enforcement of insurance policies will help to deepen its penetration for national growth because insurance policies offer lots of benefits.

Chairman of the firm, Nahim Abe’ Ibraheem who got re-elected unopposed by the shareholders, explained that insurance firms were operating in a volatile economic environment, where most of the clients were left with options of either putting food on the table for their families or paying premiums.

He said the company hopes to navigate the insurance business with injection of contemporary technology to post a more impressive output in the current fiscal year.

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