LINKAGE ENTERS INTO MERGER TALKS
Chairman of Linkage Assurance Plc, Mr. Babatunde Fatayi-Williams said the company has initiated merger talks with a reputable insurance company for the purpose of building capacity, increasing market share and providing value for its shareholders.
Addressing shareholders at the 17th Annual General Meeting hosted by the company in Lagos recently he said the move is for shareholders who have hitherto had to contend with their inability to pay dividends based on the prevailing economic situations and lack of capital with which to operate optimally and it is in furtherance of the approval obtained from shareholders at the 2008 AGM.
In his words 'We have made reasonable progress with the merger exercise and are confident that it will prove to be the best way forward for all stakeholders.'
Meanwhile, the company settled claims to the tune of N377.11 million for the year ended December 31, 2010. This is a 9.91 per cent reduction in claims settled in the previous year which peaked at N418.59 million and an indication on better underwriting by the insurance company.
Last year, the company raked in gross premium written to the tune of N2.14 billion while its gross premium earned was N2.31 billion. Also its net earned premium for the year under consideration peaked at N1.77 billion.
In the same manner, the non-life insurer raked in commissions to the tune of N106.53 million with its total underwriting income rising to N1.88 billion. Linkage Assurance within the year under consideration, incurred net claims to the tune of 377.11 million, a 9.91 per cent shortfall from the 418.59 million it coughed out in the 2009 financial year. Its underwriting profit last year was N573.74 million.
Also last year, the insurance firm raked in N19.04 million, N354.15 million and N59.56 million from its managed funds, investments and other sources respectively. The company also improved its bottom-line by as much as 606.38 per cent, reversing the N55.29 million loss before exceptional items and tax to end up with N279.98 million profit before exceptional items and tax.
The company also maintained its share capital and share premium at N2.55 billion and N729.04 million respectively in the last financial year while increasing its revaluations and contingency reserves by 25.15 per cent and 14.82 per cent respectively.
The firm grew its revaluation reserves from N351.85 million in the previous year to N440.36 million last year while its contingency reserve was raised from N432.36 million in 2009 to N496.44 million in 2010. Its shareholders' fund peaked at N3.01 billion.
Short and long term investment maintained by Linkage Assurance last year stood at N1.25 billion and N1.13 billion respectively. Also its fixed and total assets last year were N707.49 million and N4.80 billion respectively. Its insurance fund peaked at N681.62 million.
Fatayi-Williams lamented the ongoing legal battle between Linkage Assurance and the Nigerian Deposit Insurance Corporation (NDIC) over its fund that was trapped in Allstates Trust Bank Plc now under liquidation.
He said the company's inability to recover the trapped funds four years down the line has remained a clog on the expansion wheels of the company and as such, the firm is exploring the merger option as a way out.
'Our company has in the last four years operated under great financial pressure as a result of our inability to retrieve our outstanding public offer proceeds of almost N1 billion from the Nigerian Deposit Insurance Corporation (NDIC).
We have however strived to keep our heads above water and continued to meet all our operating obligations in spite of this challenge. This situation as well as the harsh and unfriendly economic and financial climate currently in existence in the business world globally has regrettably made it difficult for us to pay dividends to our shareholders and we thank them for their understanding.'