As its name implies, IEI has energy as its focus. Why focus on energy rather than the general insurance we are used to in this country?
Energy is our niche, there is no doubt about it. But there is no exclusivity about it because the energy insurance is written under the general lines. So, under our general license, we do the energy business. Again, the reason why we have chosen to focus on energy is because it is an emerging sector, but it is not an area for fringe players. If you really want to do well in the area, you need to be very focused, you need to truly understand the dynamics of the area. It is a big sector, an area on its own that requires a lot of attention. As much as you know, the nation's economy has always been predicated on energy and this will continue until other strategic resources of the economy are harnessed. So, we don't just want to be left out in what is happening in that sector.
From your experience so far, would you say it is worth it focusing only on that sector?
Definitely, because even though the gains have not been fully realized, it is worth all the efforts. It is worth all the investment and all the researches we are making. Energy is what is driving the world economy. You and I were at the three-day Investment Forum in Sao Tome and you saw how passionate their president spoke to the effect that they can't wait for their oil to be hit in commercial quantity. Energy is the key driver of most major economies in the world today. But like I said earlier, you really have to understand the dynamics of the energy business because it is not an all-comers' affair.
I am sure you appreciate that the energy sector is capital intensive. How are you coping with that?
Yes, it is an area that requires big financial strength, an area than requires skills. To play in the sector, you must have the financial muscle. Of course, that also explains why it is not an all-comers' affair. We (IEI) have always been prepared for this and that explains why we have kept on growing our working capital. During the last recapitalization exercise in the insurance industry, whereby we were expected to grow our working capital to meet the requirement, which was N3 billion, we ended up with shareholders' fund of close to N12 billion, and we are not stopping there. We are currently fine-tuning plans to raise another N10 billion, and this is recognizing the fact that you have to have that big pocket.
But it is not a question of just getting the money. You must be sure you know what you want to do with the money. The energy sector is an area you have the big ticket items coming out every now and again. If you take the value of an average oil rig as an example, you can begin to imagine what we are talking about. And this is evaluated in hard currencies and by the time you convert the money you have in naira into dollars or euro, you find out that we are talking in terms of billions. So, this is an area that requires heavy financial strength but over and above that, you also need to have the expertise.
Talking about the additional N10 billion you are planning to raise, I am sure you will be going to the capital market for that purpose. How soon do we expect this to be?
We are almost there. We have been talking to all the financial advisers. We have been holding meetings with them. We see ourselves being able to close out on this before the end of this quarter. It is hot on our table.
Looking at your corporate performance in the last three years, would you say the company is growing as fast as you would wish?
In any human endeavour there is always room for improvement. We have been adjudged as one of the fastest growing insurance companies in the Nigerian's economy today. By our own record, yes, we know we are running, we also believe we can be faster. By and large, we are satisfied with the progress we are making.
IEI is the only insurance company in the country so far focusing on energy…
In terms of focus, it is not that a few other companies don't have insurance desks, but ours have gone beyond having an insurance desk. I don't know what other companies are doing but from what we are being told, we are about the only company that has been able to summon the courage to say look, we want to be here. Others are trying to catch up with us. As would be expected, once a company is seen to be making success, you can not stop others from copying. Others are also trying to get their handle on how to play in this sector.
