Custodian and Allied Insurance Company and Signal Insurance Company have concluded their merger process as they held their court-ordered general meeting recently.

Both companies’ shareholders on different occasions voted in favour of the fusion of both companies which resulted to the formation of a new company to be known as Custodian and Allied Insurance.

The new company will be a public limited company with its shares listed on the floor of the Nigeria Stock Exchange (NSE).

Custodian and Allied have already filed the returns of the court-ordered meeting with the supervisory body of the industry, National Insurance Commission (NAICOM). The net assets forecast of the post-merger company gives net assets per share of N1.18.

It will be recalled that the minimum paid-up capital of insurance and assurance companies in the country was increased and February 28, 2007, was given as deadline for every company to comply or face liquidation.

The federal government in September 5, 2005, increased the capital base of life insurance companies from N50 million to N2 billion while that of non- life insurance companies was raised from N200 million to N3 billion.

Reinsurance companies were asked to shore up their capital base from N350 million to N10 billion. Custodian and Allied began operations in 1995 with an initial paid-up capital of N5 million prior to the merger, its authorised share capital was N1 billion with N750 million paid up.

The company’s premium had over the years grown from N30.4 million in 1996 to N1.08 billion in 2005. Its total assets of N16.5 million as at December 1996 have appreciated to over N2.13 billion by the close of business in December 2005.

The company, which is currently having a private placement, according Usman Michael Ojo, has grown significantly since inception because of its culture of excellence.

He said that the primary objective of the merger is to position the post merger company for sustainable superior technical and financial performance. He said the company expects to significantly increase its net operating profit as well as size of its balance sheet by increasing its revenue, cutting cost and looking into continuous productivity gains to boost shareholders’ value. The emerged company is expected to compete better with other local insurer, thereby increasing market share, surpassing the competition and consequently increasing gross revenue, he said.

The Company’s Managing Director, Wole Oshin, said it was due to hard work and commitment to share vision that brought about the success of the merger. He added that the product of the merger would strive to surpass the minimum capital base mandated by NAICOM.

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