IGI acquires stake in SONARWA

Ayeleso Oladele, Lagos

Mr Adeyemo Adejumo, President , Chartered
Insurance Institute of Nigeria (CIIN), (right),
decorating the new CIIN Calabar chapter
chairman, Mr John Urom, with the
paraphernalia of office at the investiture
ceremony held in Calabar recently. A leading insurance company in the country, Industrial and General Insurance Plc (IGI), has acquired 35 per cent majority stake in Society Nouvelle d’Assurance du Rwanda (SONARWA), Rwanda ’s largest insurance company.

The acquisition is in line with IGI’s regional expansion programme, which had seen IGI holding majority shares in the National Insurance Corporation (NIC) Limited, Uganda; Network Insurance Company Limited and Network Life Assurance Company Limited, Ghana (now renamed IGI Ghana Limited); and Gamstar Insurance Company Limited, Gambia.

Announcing IGI’s stake in SONARWA at a formal ceremony held in Kigali , Rwanda on Wednesday, April 30, 2008, Mr Remi Olowude, IGI’s Executive Vice Chairman, said the acquisition was an opportunity for IGI to contribute to the progress of Rwanda ’s economy.

“Our partnership with SONARWA is in line with our stated goal of expanding in the continent and bringing our expertise to affect the lives of the people of the continent, while helping to develop their economies,” he said.

Olowude emphasised that IGI will not relinquish its responsibility of effectively managing SONARWA to ensure that it turns out to be one of the biggest insurance companies, not only in the East African region, but in the entire African continent. “We will ensure that SONARWA achieves its target growth within the shortest possible time,” he stated.

The new acquisition in Rwanda will allow IGI to extend its acknowledged expertise in the insurance business to Rwanda , one of the fastest growing economies in East Africa , whose insurance market is one of the most vibrant in the region.

Under the terms of the strategic partnership arrangement with SONARWA, IGI is required to nominate three directors to the board and to appoint a new management to run the company’s day-to-day operations.

IGI brings to SONARWA, a wide berth of experience acquired from the Nigerian insurance market, one of Africa’s largest insurance market where IGI has been able to increase its market share rapidly within a short period of time.

The stake in SONARWA is IGI’s third strategic investment in East Africa in the last three years. IN 2005, IGI purchased the Ugandan Government’s 60 per cent stake in NIC Uganda. NIC had since been turned around into a profitable company which paid dividends to its shareholders for the first time in 2006 and recently paid the largest single claim of N851.71 million ($7.22 million) in the East African Region. IGI has also acquired a banking licence in Uganda and the roll-out arrangements have been concluded for the new venture, Global Trust Bank Limited, to commence trading soon.

IGI has an impressive track record as the most viable insurance company in Nigeria. Since its emergence in the Nigerian insurance market 16 years ago, its rapid and prompt claims payment record is second to none. Records showed that in the last five years, between January 2002 and December 2007, the company paid claims amounting to N16.4billion ($138.98 million). It also generated gross premium income in excess of N7.29billion ($61.8million) in 2007. With shareholders’ fund now in excess of N23billion ($194.92 million) and assets base of more than N32.75billion ($277.54 million) as at 31st December 2007, as well as managed pension funds in excess of N23.6billion ($200 million), IGI Plc is the largest and best run insurance company in Nigeria.

‘Recapitalisation has transformed Mutual Benefits’

Oladele Ayeleso, Lagos

United States of America-based The Wall Street Journal has described Mutual Benefits Assurance Plc as a “prime example of a company that has been transformed by the recapitalisation of the insurance industry in Nigeria .

The April edition of the newspaper explained that “since raising its fully-paid up share capital from N500 million to N3billion, the Lagos-based general and life insurance provider has expanded into a group of five companies and extended its interests beyond the national borders. It is now among the most traded stock in the Nigerian Stock Exchange”.

Quoting extensively from an interview with the Managing Director/Chief Executive of Mutual Benefits, The Wall Streeet Journal noted that recapitalisation has essentially developed the potential of the insurance industry in Nigeria .

Mr. Ogunbiyi pointed out that capacity has been created, liquidity increased and the industry can now hire the best brains in the competition for manpower.

“Before this, because the industry was not competitive, the best brains were going to the banking sector, the telecoms sector and to the oil and gas sector. It was hard to compete. Now, it is a different story”.

Continuing with the Mutual Benefits story, The Wall Street Journal said the company has continued to play big in the capital market and has made substantial investments in the real estate sector.

According to the newspaper, Mutual’s story is that its products offerings and competitive approaches have successfully generated a revenue stream that has given its stock attractive earnings and returns from strategic investments.

On the insurance company’s collaboration with foreign strategic investors, the newspaper noted that the company has taken the lead in securing direct investment. It gave as examples, the 25 per cent stake by US-based Augustus Group and 25million dollars worth of convertible bonds fully subscribed to by a European-based investment company.

Quoting Mr. Akin Ogunbiyi, the newspaper pointed out that the Nigerian insurance is fast evolving into a vital financial instrument for national development.