Shareholders of Intercontinental WAPIC Insurance Plc have approved the company’s Board of Directors’ plan to to raise additional capital of up to N5bn.

The shareholders also approved the company’s bid to increase its share capital to N8.5bn.

A statement by the company on Monday noted that the shareholders gave the approval at its annual general meeting in Lagos.

According to the statement, the shareholders agreed that “the directors be and are hereby authorised to raise, whether by way of public offering, private placement, rights offering, book building process or other methods or combination of methods, additional capital of up to N5bn or equivalent in foreign currency.”

The company had explained that the funds were needed to further aid its investment drive and enhance its underwriting business.

The statement added that the shareholders meeting also urged the board to enhance the value of their return on investment through dividend payout in the 2012 financial year.

The National Coordinator, Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu, noted that the ability of the company to sustain investors return on investments would aid the sustainability of the mutual relationship between the shareholders and the company.

The Chairman of the company, Mr. Aigboje Aig-Imoukhuede, was quoted in the statement as saying that the decision to raise the share capital of the company was borne out of the need to empower the company to effectively execute its core insurance business.

“The board sees the insurance industry at an interesting point of development. Insurance is different compared to banking. As a result of the huge claims payable to insurers, there is a need for a huge capital. An insurance company that is not well capitalised cannot function but a bank can function as long as it does not get into problems,” he stated.

The company’s result for the financial year ended December 31, 2011 showed that the company’s profit after taxation closed at N290.5m, from a loss position of N587.6m the year before.Its total assets grew by five per cent from N11.46bn in 2010 to N12bn in 2011.

Source: Punch/Udeme Ekwere