AIICO Insurance Plc is arranging to increase its authorised share capital through the creation of 16 billion new ordinary shares of 50 kobo each.
The board of directors of the insurance company has called an extra-ordinary general meeting of shareholders for next month during which shareholders are expected to consider and approve the creation of additional shares.
The board of the insurance company is seeking shareholders’ mandate to increase the company’s authorised share capital from N10 billion of 20 billion ordinary shares of 50 kobo each to N18 billion of 36 billion ordinary shares of 50 kobo each.
Market analysts believed that the increase in authorised share capital was meant to create headroom for the company to raise new capital through issuance of new equities.
The National Insurance Commission (NAICOM) recently released new capital requirements for insurance companies. Many insurance companies are expected to raise funds to beef up their capital base. Many analysts also expected a considerable consolidation of the Nigerian insurance sector, with capitalisation as a major benchmark.
NAICOM had in May 2019 released new capital requirements for insurance businesses with a 13-month compliance period for operators to shore up their minimum capital base to the required level. The minimum paid-up share capital of a life insurance company was increased from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion while re-insurance companies were directed to raise their capital base from N10 billion to N20 billion. Insurance companies are required to comply with the new minimum capital base by June 30, 2020.
