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SHAREHOLDERS of listed insurance companies in the country may have to wait longer to get dividends, as insurers battle negative reserves. Following the capital market crash that occurred in the country in 2008, most underwriters who had invested heavily in equities have their accounts in negative, while the share value of insurance stocks, alongside other listed equites witnessed a sharp price drop. It was learnt that this allows most underwriters to incur heavy losses and were made to make huge provisions for doubtful investment, leading the firms to have negative reserves. While most of the underwriters are making profits on a yearly basis, Leadership investigation revealed that insurers devoted most of these profits to clear their negative reserve, and until they extinguish the debts, shareholders might have to wait longer to get a good returns on their investments. Insurance shareholders have at various Annual General Meeting(AGMs) lambasted underwriters for their failure to give them dividend or bonus, especially as some companies have declared nothing to their shareholders in the last five years. Speaking on this development at a seminar organised by the National Insurance Commission(NAICOM) for insurance correspondents in Gombe, Gombe State over the weekend, the Director, Finance and Account, NAICOM, Mr. Nicholas Opara, disclosed that, by regulation, the companies are not allowed to pay dividend until they clear their negative reserves. “The commission will always ask them to extinguish the negative reserves before they pay dividend. Hopefully, most of them are making profit and if it continues, they should be able to declare dividend in the near future,” he pointed out. Shareholders of insurance firms across the country are unhappy that their companies, for years, have yet to declare dividend. The shareholders, who expressed their grievances at the AGMs of the underwriting firms that had so far held their 2015 AGMs, were unhappy that their companies, in spite of making profits, still could not pay meaningful dividend or bonus to shareholders, while some had their accounts in negative after offsetting their previous debt. National Chairman of the Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, was unhappy about the low level of insurance penetration in the country and its contribution to the Gross Domestic Product (GDP), stating that this has accounted for the below par value at which most of the listed insurance stocks are being sold on the NSE. The shareholders, he pointed out, requires return-oninvestment and performance, charging insurers to improve in this regard.


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