Cornerstone Insurance capitalise’s share premium, give bonus to shareholders

In the bid towards meeting the recapitalization requirement for players in the nation’s insurance industry, Cornerstone Insurance Plc has capitalised the sum of N1.718 billion from its share premium account to give shareholders a bonus of 7 new shares for every 30 shares held in the Company.

This is as the Company has also increased its authorized share capital from N7.5 billion to N9.25 billion by the creation of additional 3.5 billion ordinary shares of 50 kobo each to rank with existing shares of the company.

These were some major approvals secured by the Board during its 28th Annual General Meeting held in Lagos, in compliance with Covid-19 specifications.

Segun Adebanji, group chairman of Cornerstone Insurance Plc said the above resolutions were in line with the Company’s roadmap to meeting the industry’s recapitalization requirement, as well as to position the firm for more competitiveness.

Looking at the Company’s financials for the year ended 31st December 2019; gross premium written grew by 13 percent from N11.57 billion in 2018 to N13.058 billion in the review year.

Adebanji said premiums from life insurance accounted for 32.5 percent of Gross Premium Written, an increase from 25 percent in the previous year.

He said the largest contributors to General Business Gross Premium Written were Bond, Engineering & Accident (N2.12 billion), Oil & Gas (N2.04 billion) and Motor (N1.36 billion).

Cornerstone during the same period recorded a profit before tax of N4.o13 billion, a 22 percent increase from N3.284 billion in 2018, while profit after tax stood at 4.108 billion, a 36 percent increase from N3.017 billion.

According to him, investment portfolios yielded positive performance figures driven mainly by trading activities on the NSE, fixed income securities and the profit from continuing operation of a joint venture arising mainly from the gain on disposal of investment property.

Shareholders who spoke at the meeting including Timothy Adesiyan, president of the Nigerian Shareholders Solidarity Association, and Adeleke Oladimeji of Dedicated Shareholders Association commended the board and management for turning around the company on the path of growth.

They pleaded with the board to ensure the brand name ‘Cornerstone’ stands post recapitalization.

Adebanji also assured the shareholders, that the Board of Directors and Management of Cornerstone have taken a number of steps towards minimizing any adverse effects that may result from the slump in economic activity during to covid-19 and other factors.

“We have built extensive scenario planning models that ensure that our operating expense profile is aligned with revenue expectations, whatever the financial impact of the pandemic. Our ultimate goal is to ensure that shareholder value is not eroded.”

Ganiyu Musa, group managing director/CEO of the company explained that during the year, the Company received an approval in principle from NAICOM to start composite Takaful Insurance, stating that Cornerstone Takaful Insurance Company Limited will thus be a subsidiary focused on selling both family and general Takaful products in Nigeria.

He said this is expected will see an increased contribution to the Group’s revenue and profitability in the coming years.