Investors in the Nigerian Stock Exchange have decried what they described as the dwindling fortunes of insurance stocks that shed N5.8 billion in the last one month.
The shareholders that are worried about the free fall in the shares of insurance companies on the nation’s emerging market emphasised the need for the industry regulator, and professional bodies to intensify efforts at mitigating the challenges causing the lull witnessed in the sub-sector.
Some of them alleged that many listed insurance companies had poor corporate governance structures, adding that this poor management translated into non-payment of dividends, mostly due to negative, retained earnings.
The Founder, Independent Shareholders Association of Nigeria, Chief Sunny Nwosu, insisted that insurance regulators must find ways to tackle the ills impeding the success of the sector.
He said, “The regulators and management of these insurance companies must find out what is happening. They have their financials; they should know what is happening, whether it is the balance sheet that is dragging them back or debt issue or lack of research and development. They should not fold their hands and watch them.”
The President, Constance Shareholders Association, Mallam Shehu Mekail, said regulators must review existing laws in the sector, and ensure that the board and management operated with utmost transparency and accountability.
He pointed out that insurance services in the country had a very low level of penetration, stressing the need for more awareness campaign for insurance products
in Nigeria.
“In the US, it is the insurance companies that own the banks, and they have liquidity, but here, people are not yielding to them; we take a lot of risks here. The negative attitude of Nigerians might not be unconnected with the poor attitude of the insurers as regards non-payment of claims. Some insurance companies default in payment of claims, which has adversely affected the image of the industry, and consequently, the confidence reposed in insurers. The regulatory authorities must sit up,” he said.
