Saham Group, a pan-african company with origin in Morocco which held a 40 per cent equity stake in Nigeria’s Unitrust Insurance Company Limited, has exited.
The company is exiting at a time the Nigerian partner, Unitrust, is raising capital to comply with local regulation, which requires companies to increase their paid-up share capital to about 300 percent.
The National Insurance Commission (NAICOM) had asked underwriting companies in the industry, effective May 20, 2019, to increase their paid-up share capital from N2 billion to N8 billion for life companies, from N3 billion to N10 billion for general business, from N5 billion to N18 billion for composite business, and from N10 billion to N20 billion for reinsurance companies. The commission gave June 30, 2020 as deadline.
A high level industry source who preferred to remain anonymous told Businessday that Saham had attempted selling its stake to Salam of South Africa but failed following resistance of other local shareholders, who believed it was a breach of process as they should have right of first refusal.
But Saham has, however, exited, selling its shares to the other existing shareholders, led by Theophilus Danjuma, a retired Nigerian army general.
Businessday findings show that Unitrust, owned by a small number of shareholders, is embarking on a rights issue any moment. The rights issue is expected to boost the insurer’s paidup share capital before its long-term plan to consolidate a merger in the course of the ongoing recapitalisation exercise.
The source also told Businessday that Unitrust was already discussing with another private insurer for a merger deal as due diligence was said to have started already.
Under the initial partnership, Saham Unitrust Insurance Nigeria Limited’s group gross written premium ( GWP) rose by 27 percent to N3.168 billion at the end of December 2018 from N2.486 billion at the end of December 2017.
The increase in the group’s level of activity was mainly as a result of strategic partnership and increase in market drive, which also impacted the bottom line as well as return on investment to shareholders.
Its profit before tax stood at N806.18 million at the end of 2018 from N818.04 million at the end of 2017, while its profit after tax rose to N759.96 million from N427.68 million.
The group’s underwriting profit stood at N220.25 million in the period under review from N303.79 million in the corresponding period of 2017. Its gross earnings rose to N4.53 billion at the
end of December 2018 from N3.69 billion at the end of December 2017.
Saham Unitrust’s net claims expenses rose by 73 percent to N505.11 million in 2018 from N291.94 million, attesting to its ability to continue to promptly respond to the claims demands of its clients.
The group’s total investment income increased marginally by 0.34 percent to N1.1484 billion as at December 31, 2018 from N1.144 billion on December 31, 2017.
Saham Unitrust had stated that it would continue to intensify its efforts to ensure that investment income remains a key revenue source.
The company during the 2018 financial year paid a dividend of 12kobo per share, summing up to N396 million for the year ended December 31, 2018, from N198 million paid in the corresponding period of 2017.
The group has a shareholders’ fund of N11.17 billion at the end of 2018 financial period.
The company, a general insurer, underwrites motor, marine, aviation, engineering, bonds, fire and special perils, burglary, money, goods in transit, personal/ group personal accident, employers’ liability, fidelity guarantee, including oil and gas insurance, and is a major player in travel insurance.
John Ijerheime, managing director of the company, is always passionate for excellent service delivery.
