Standard Alliance Life Assurance Limited (SA Life) has secured the approval of its shareholders to raise additional capital to support operations of the company and position it for stronger market competition.
The approval, which came through a special business at the company’s annual general meeting held in Lagos, reads “That the directors are hereby authorised to take all steps deemed necessary to improve the capital of the Company either through a merger or a business combination with other insurance companies or through raising additional capital by way of rights issue, special placements or combination of both.”
Notwithstanding the challenging business environment SA Life during the 2013 financial year achieved a gross production of N4.63 billion as against the N4.3 billion it posted in 2012.
A breakdown of the gross production revealed that the sum of N3.45 billion represents performance in gross life premium income (group and individual life businesses) while N1.18 billion came from investment-linked products.
The company’s gross life premium of N3.45 billion indicates a 17.3 percent growth over N2.94 billion achieved in 2012.
During the year under review, the company paid out total claims of N2.78 billion (group life N1.62 billion and deposit administration withdrawal N1.16 billion) to affected policyholders and genuine claims’ beneficiaries in 2013 as against N2.65 billion in 2012.
O’tega Emerhor, chairman of the Company told the shareholders that the company recorded negative operating result of activities in 2013 compared with a profit position in 2012, clarifying that “this was as a result of time apportionment principle applied in recording gross premium income in the year 2013.”
The chairman who reassured the owners of the company that the board was finalising strategies to ensure that the planned July time for the meeting was achieved going forward, hinted that “the issue of insecurity challenge induced by the activities of the Boko Haram sect, escalating day in day out in the Northern region, was a permanent experience all through the year and our business offices in these areas were adversely affected.”
Despite the above challenges, Emerhor informed the shareholders that “we are strongly committed to pursuing strategies that will bring about optimum utilization of resources and reducing costs,” noting that “as I mentioned in my address during last year’s AGM, all efforts are nearing conclusion stage to recapitalize, restructure and reposition your company in readiness to dominate the industry.”
Managing Director of the company, Austin Enajemo-Isire, explained that the financial year ended December 31, 2013 was an eventful year in the industry, explaining that NAICOM’s enforcement of the “No Premium, No Cover” policy embedded in the Insurance Act of 2003 and effective January 2013 was a significant plus for the insurance industry as it was expected to enhance cash-flows and improve operating investment abilities for insurers.
According to him, though the enforcement has created premium payment structure and teething timeline remittance challenges, he strongly believed that in the years ahead, the industry shall reap the benefit of the enforcement policy.
Enajemo further expressed hopes that the introduction by NAICOM of Takaful (Islamic) insurance guideline to complement its goal to promote financial inclusion and insurance business in 2013 will provide the insurers access to a new market that has been apprehensive about insurance.
While observing that the insurance industry was intensely competitive and more challenging due to inadequate liquidity, the Managing Director assured the company’s shareholders of Management’s ability “to surmount challenges, mitigate risks as well as take advantage of profitable opportunities to further position the brand as one of the best.”
