Real Insurance Malawi minority shareholders will for the third year not get returns from their investments. This follows a K96 million (about $384 000) loss the company incurred in 2011 due to unprecedented rise in spare parts, high litigation costs and fraud.
The news did not please minority shareholders who attended the companyâ€™s annual general meeting in Blantyre on Friday and most of them were at pain to support the election and re-election of directors as well as approve their fees and sitting allowance motions.
A minority shareholder, Sunduzwayo Madise, asked the board to appreciate that the company was not making profits and as such, there was no need to appoint new directors.
â€œI see no need in appointing a director from Kenya who will need to be frown in and out of the country for committee and board meetings, especially this time when the company is not making profits.
â€œWhen things get tough, we need to cut certain costs. But it seems the board is not appreciating what is happening on the ground. My share value keeps on going down and that is worrisome,â€ said Madise.
He also asked Real Insurance directors to explain what they are doing to turn the situation around so that the company starts making profits.
Real Insurance chairperson Thom Kanyuka said the company will continue to be aggressive in claim and cost control and in growing premiums with emphasis on expanding non-motor insurance portfolio.
â€œI am pleased to say this year, although the first quarter was still rough, things have started to improve and we are confident that in the third and fourth quarter the trend will continue. The company proposes to continue to be proactive,â€ he said.
Kanyuka also brought up the issue of recapitalisation, arguing the Reserve Bank of Malawi (RBM) premium payment directive led to solvency issues and Real Insurance has to be recapitalised.
â€œAlthough a welcome development, the introduction of premium payment directive had a lot of impact on Real Insurance Company because it meant that premiums that were with our brokers prior to the directive were a challenge to collect.
â€œThis led to solvency issues and RBM had identified shortfalls in the company, so Real has to be recapitalised,â€ said Kanyuka.