Cornerstone Insurance gears up for new capital requirements amid industry reform
By Esther Agbo
Cornerstone Insurance Plc has expressed readiness for potential regulatory changes, particularly in the area of recapitalisation, as the industry braces for new capital requirements proposed by the National Insurance Commission.
The company’s Managing Director, Stephen Alangbo, made these remarks during the firm’s 32nd annual general meeting in Lagos.
Alangbo emphasized the company’s strategic positioning to adapt to any forthcoming recapitalisation mandates. He highlighted that these measures are expected to strengthen the firm’s financial stability, enhance its underwriting capabilities, and pave the way for investments in cutting-edge technologies and innovative insurance products.
“We are well positioned for any recapitalisation measures that may be introduced by the regulator. We believe that this will enhance our financial stability, expand our underwriting capacity and allow us to invest in new technologies and innovative products.” Alangbo stated.
He reiterated Cornerstone Insurance’s commitment to maintaining a responsible and sustainable business model that generates long-term value for stakeholders.
As the Nigerian Insurance Industry Reform Bill 2024 progresses through legislative review, with its provisions calling for a substantial increase in capital requirements, life insurance companies from N2bn to N15bn, general business from N3bn to N25bn, and reinsurance from N10bn to N45bn, the company is keenly monitoring the situation. This reform parallels an ongoing recapitalisation exercise within Nigeria’s banking sector, reflecting a broader regulatory trend towards increased financial robustness.
During the AGM, shareholders voiced concerns regarding the potential impacts of these regulatory changes on the company’s operations.
The National Coordinator of the Independent Shareholders Association of Nigeria, Moses Igbrude, questioned the company’s strategies to navigate the anticipated legislative changes. He emphasized the importance of proactive measures in safeguarding shareholder interests.
Similarly, another shareholder, Nornah Awoh, echoed these concerns, particularly regarding the company’s dividend payout amid the looming recapitalisation requirements. He urged the management to outline clear strategies for future growth and sustainability.
In response, Cornerstone Insurance’s Chairman, Segun Adebanji, outlined the company’s plans to enhance insurance penetration in Nigeria. He said the company aims to expand its retail business, making insurance more accessible to a broader segment of the population stating, “We are placing a significant emphasis on improving insurance penetration within Nigeria by growing our retail business. By expanding our reach and making insurance products more accessible to the wider population, it is our goal to enhance financial security and resilience among Nigerians. The focus on retail growth will be a key driver of our strategy to increase market penetration and foster a more inclusive Insurance landscape.”
The company’s financial performance for the year ending December 2023 demonstrated resilience and growth, despite the challenging economic environment. Cornerstone Insurance reported a 38 percent increase in its gross revenue, reaching N30.6bn compared to N22.2bn in 2022. The implementation of the new IFRS 17 standards saw the company report an insurance revenue of N25.91bn, a 26.5 percent growth from N20.48bn in the previous year. Additionally, the firm recorded a profit before tax of N17.08bn, a significant recovery from a restated IFRS 17 loss of N1.06bn the prior year.
As Cornerstone Insurance navigates the evolving regulatory landscape, the company remains focused on leveraging its strong financial position and strategic initiatives to achieve sustained growth and deliver value to its stakeholders.
