AIICO Insurance Plc, in a memo to the Nigerian Stock Exchange (NSE) today, said it is locked in non-binding discussion with a new investor. The company had gotten approval during its 2016 Annual General Meeting (AGM) of shareholders.
“In furtherance of an approval and authorization to that effect granted by its shareholders at the 46th Annual General Meeting… AIICO Insurance Plc (AIICO) has opened discussions with an investor on a Non-Binding basis for Investment in the Company (AIICO Insurance Plc).”
Shoring up its capital base became imperative after The National Insurance Commission (NAICOM) which regulates the insurance industry put in place a risk based capitalization programme.
The programme instructs that insurance companies would only be able to cover risks according to how much capital they have. For companies to cover bigger risks, they would have to have more capital. Several insurance companies have also signalled indication to raise their capital base. WAPIC insurance recently sought the approval of shareholders to embark on a capital raise. Figures from AIICO’s HY 2017 financial statements show it had shareholders fund of N8.5 billion. AIICO insurance shares are currently trading at 57 kobo on the NSE, year to date down 6.8 percent.
AIICO commenced operations in Nigeria in 1963 as an Agency of American Life Insurance Company (“ALICO”) – a subsidiary of American International Group (AIG) at that time.