Coronation Insurance Sheds 9.5% of Market Valuation

Coronation Insurance Sheds 9.5% of Market Valuation

Coronation Insurance Plc. (Ticker: WAPIC) has a large haircut of 9.5% in the stock market on Monday as the company failed to attract buying interest. The insurance player is one of the perpetual cheap stock investors can find in the Nigerian Exchange, less weighty to drive the local bourse.

Yesterday, the insurance company’s share was offloaded massively following its announcement to delay audited results, causing about a 10% decline in its market valuation – a listed company with a valuation of less than N10 billion.

Its share price tanked to 38 kobo from 42 kobo after 5571,355 volumes traded in the Nigerian Bourse yesterday. The company was valued at less than N9 billion at 38 kobo on 23.991 billion outstanding shares.

The company’s equity capital as of December was N21.165 billion, which means its total asset valued at N41.05 billion was funded majorly by owners’ capital.

Who is selling? 66.89% of the Insurance Company’s shares outstanding were owned by three major shareholders – Coronation Capital (Mauritius) 40.82%, Reunion Energy Limited -20.89% and Coronation Asset Management 5.18%.

Its directors holding – direct and indirect – totalled 8.76%. A document reviewed by MarketForces Africa showed that Coronation Insurance Plc. met stock market free float requirement as of December 2022.

A total sum of N2.292 billion shares was available, accounting for 24.71% of its shares outstanding. Is it safe to say an insider is selling shares? Not so much we know for now.

Largely, insurance stocks are not popular with local investors due to unimpressive performance. Few Nigerians have an interest in insurance policies – a trend that was built over a lack of proper education.

Nigeria’s insurance industry will see its medium-term growth be increasingly driven by the life insurance segment, with an expected market share of 51.4% by 2027, according to Fitch Solution.

Both major segments are, however, becoming increasingly attractive for investments over the medium term, owing to the country’s large and growing population, rising disposable household incomes, and improving business and consumer confidence.

The growth potential of both life and non-life insurance will, however, be limited by widespread poverty and insurance affordability.

As even the more affluent middle-class consumers tend to avoid purchasing insurance, Nigeria’s potential consumer base needs to be more educated about the benefits of life and non-life insurance coverage, Fitch said in a premium report. # Coronation Insurance Gets Valuation Haircut

By pattern, the Nigerian Exchange insurance index rarely moves positively, at best it remains steady and when it falls, it is heavy. WAPIC operates a composite full-line insurance company that hasn’t been the best performer –weak earnings and dividend track record over the years.

In 2020, it changed its name from WAPIC to Coronation Insurance after it obtained approval for bancassurance model. Coming back from loss-making in 2021, the group declared N1.35 billion profit in 2022. # Coronation Insurance Gets Valuation Haircut

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