WAPIC Insurance Gets NGSE Nod For N6bn Rights Issue

WAPIC Insurance Gets NGSE Nod For N6bn Rights Issue

The board of WAPIC Insurance Plc, last week got the approval of the Nigerian Stock Exchange (NSE) to raise N5.933bn by way of rights to existing shareholders.
The company is issuing 15,613,194,623 ordinary shares of 50 kobo each at 38 kobo per share, according to a notice by the NSE.
The application for the approval and listing of a Rights Issue made through its stockbroker, Coronation Securities Limited noted that the offer would on the basis of seven new ordinary shares for every six ordinary shares held as of the Thursday, September 19, 2019 qualification date.
The rights issue proceeds will help WAPIC Insurance meet the new capital base for insurance companies set by the industry regulator- the National Insurance Commission (NAICOM). This is in a bid to ensure that operators are enhanced to write big-ticket transactions, especially in the oil and gas, maritime, aviation and power sectors, most of which are taken abroad.
While the new capital requirement for life insurance business was raised by NAICOM from the N2bn benchmark set in February 2007, to N8bn; General insurance business was raised from N3bn to N10bn. Those in the composite business had their capital base jerked up from N5bn to N18bn. For reinsurers, the new NAICOM minimum capital is set at N20bn, double the previous N10bn, with effect from June 30, 2020, as stated in the circular.
WAPIC Insurance, like its peers in the general insurance business, is expected to raise its capital to N10bn from its current N6.69bn and now requires N3.31bn in fresh capital injection.
One big-ticket transaction the nation’s insurance industry may miss out of is 72% of the insurance business of the Dangote Oil Refining company, with an insured value estimated at $6.8bn, which may go to foreign operators, when it eventually becomes operational due to low underwriting capability for bigger risk in the Nigerian market.
This is in addition to another $8bn insurance business from energy companies to foreign insurers owing to their low capital base and lack of the human capital for such a technical area.

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