Eminent Members of the Board of Directors, Distinguished Shareholders, Valued Customers and Friends of IGI, Ladies and Gentlemen.

I sincerely and warmly welcome you all to this 17th Annual General Meeting of your company and I am glad to present to you the company’s Annual Report and Financial Statements for the year ended December
31, 2008.

Before presenting the details of our performance in 2008, permit me to give an overview of the features and developments in the environment in which your company operated during the financial year under review. This will enable us to appreciate the opportunities and challenges the company faced during the period.

OPERATING ENVIRONMENT
In 2008, the global economy experienced unprecedented crisis. This was as a result of the global economic meltdown engendered by a collapse of the financial sector. The global financial crisis was triggered off by the financial crisis in the United States following high default rates in non performing loans granted to the mortgage sector. A lot of international financial institutions had invested substantial funds in the mortgage market in the United States during the boom era but found it difficult to recall the funds because of repayment difficulties and the depreciation in the underlying assets. These created liquidity problems in the banks involved, leading to the premature realization of some assets and curtailment of credit in order to meet the request for withdrawal of funds by customers.

The concerns about the effect of the global economic crisis on the health of banks and non-bank financial institutions in various countries across the globe made it imperative for respective governments and regulators to inject economic stimulus packages into troubled institutions with a view to boosting productivity and restoring public confidence in the system. For example, in October 2008, the American government approved a bail-out plan to the tune of $700billion for the United States economy. Similarly, in December 2008, the British government announced a rescue
package of $850billion for the country.

As a result of the economic meltdown and falling exports, various economies of the world recorded declining Gross Domestic Product (GDP). For instance, the United State’s GDP declined by 0.9% while that of Britain and Japan declined by 3.5% and 4.4% respectively. At the same time, the level of unemployment increased in many rich countries, while inflation also rose in many emerging markets and developing countries due to higher pricing of energy, food and commodity as well as rapid growth in money supply.

The effects of the global economic downturn on the Nigerian economy were evident. Oil prices tumbled and the revenue generation by the government, the prime mover of the economy, declined considerably because of over dependence on oil export as the major source of foreign exchange earnings. Oil prices fell from its peak of $140 per barrel in July, 2008 to $40 per barrel by end of the year, thereby losing 70% of its value within five months. Inflation also increased, moving from a single digit of 6.6% at the beginning of the year to 15.1% by December, 2008. As a result of the decline in foreign exchange earnings, the government had to devalue the Naira from N117 per $1
at the beginning of January, 2008 to N131.25 per $1 by December, 2008, as the demand for foreign currency could not be met on a continuous basis if it remained at its previous rate of exchange. In the parallel market, the exchange rate went as high as N140 per $1. The Nigerian foreign exchange reserves increased to $55billion in December 2008 from $52billion in December 2007. Total external debt also marginally increased from $3.65billion in December 2007 to $3.72billion in December 2008.

The global economic meltdown also took its toll on the Nigerian capital market as the market capitalization decreased by 28.1% from N13.29trillion in 2007 to  N9.56trillion in 2008, while the All-Share Index fell by 45.8%; namely, from 57,990.22 at the end of 2007 to 31,450.78 in 2008. This posed a big threat to the profits of insurance companies that had invested heavily in the capital market.

Apart from the effects of the global economic melt down, the Nigerian economy was also confronted with peculiar challenges in 2008. The economy faced critical challenges in power supply, security, law and order and the provision of basic infrastructural needs e.g. roads and railways. The activities of the Niger Delta militants also reached its peak in 2008. There were deliberate attacks on oil pipelines and installations. Hostage taking of oil workers and perceived political opponents became rampant, which resulted in the country losing a lot of revenue that would have accrued from the production and sale of crude oil.

These, distinguished shareholders, are the features and developments in the environment in which your company operated in 2008 and which contributed in no small measure to the performance recorded by the company in the year under review.

OPERATING RESULTS

THE GROUP
This is the first time our company would be presenting a Group Financial Statement. The financials of the company and its subsidiaries were consolidated in line with the Statement of Accounting Standard No. 27 issued by Nigerian Accounting Standard Board, which became operational from 1st January, 2008.

Since this is the first year of consolidating our Group results, there are no comparative figures. An analysis of the Group performance shows that in 2008 the Group had total assets of N44.4billion and shareholders fund of N30.53billion. The Group recorded a Gross Premium of N9.5billion, Total Income of N10.094billion and Profit after Tax of N482million.

Our African Expansion Programme is on course and I wish to assure you, our respected shareholders, that the Group performance will continue to improve in the years ahead as we turn around the fortune of the subsidiaries that we acquired outside the country.

THE COMPANY
Distinguished Shareholders, the challenges in the Operating Environment resulted in the relatively subdued performance of your company for the year ended December 31, 2008.

An analysis of the financial statements shows that the company’s total assets increased marginally by 10% (N34.04billion in 2007 to N37.36billion in 2008) as against 131% growth in 2007. The crash in the capital market experienced in 2008 adversely affected our quoted stock portfolio resulting in diminution in the stock value by N2.2billion. Also, in line with the National Pension Commission’s directive to all Insurance companies that hitherto managed pension assets, your company had to transfer to our subsidiary, IGI Pension Fund Managers, a total of N2.87billion pension assets.

During the year under review, your company recorded a growth of 19% in Gross Premium Income from N7.1billion in 2007 to N8.4billion in 2008. The underwriting profit increased significantly by 34% from N2.1billion in 2007 to N2.82billion in 2008 while investment and other income declined by 17% from N2.6billion in 2007 to N2.2billion in 2008 as a result of the global economic meltdown.

The company recorded a profit before tax and exceptional item of N1billion and after charging for losses suffered on the revaluation of equity investment which is classified as Exceptional Item, the company made a loss after tax of N348.55million. In spite of the loss, the company’s shareholders’ funds increased by 13% to N28.82billion during the year under review from N25.47billion.

AFRICAN EXPANSION PROGRAMME
Distinguished shareholders, your company consolidated on its ownership of subsidiary companies in other African countries as part of our strategic African Expansion Programme. Specifically, we consolidated on our majority share ownership of the National Insurance Corporation (NIC) of Uganda. With an effective management structure put in place, NIC has been turned into a profitable venture, and dividends have been paid to all the shareholders in the past four years since IGI took over the management of the Corporation.

The success of the Ugandan experience has prompted IGI to expand its presence to other African countries. Our presence is already felt in Ghana where we operate as IGI Ghana Limited and IGI Life Assurance Limited; in The Gambia, where we are known as Gamstar Insurance Company Limited; and Rwanda where our stake in Societe Nouvelle d’Assurances du Rwanda (SONARWA S. A.), the largest insurance company in the country, was increased from 35 per cent to 64.25 per cent this year.

I am pleased to report that your company also has a fullfledged banking subsidiary called Global Trust Bank, Uganda which started operation in December, 2008. This investment is in addition to our holding of 24% shares in the Bank of Commerce and Investment, Burundi (BBCI).

Plans are at an advanced stage to have IGI subsidiaries in Sierra Leone, Tanzania, Kenya, Sao Tome & Principe, Sudan and Burundi. The ultimate goal is to export our services to all the continents of the world. The tempo of the internationalization of our business will increase to the benefit of investors in IGI and other stakeholders in Nigeria, Africa and the world in general.

BONUS ISSUE
As a result of the economic meltdown and the resultant negative effect on profitability, the directors are unable to recommend a dividend for the 2008 financial year.

However, I am pleased to inform you that in concert with our resolve to maintain a steady growth of your shareholding in the company, your Board is recommending a Bonus issue of 1 new share for every 10 shares previously held at close of business on 30 November 2009.

FUTURE PROSPECTS
Distinguished Ladies and Gentlemen, as we stride confidently into our 18th year of operation, I affirm that IGI will continue to set the pace in the industry by continually delivering professional, customer-centric and value added services, which we have now taken beyond the shores of Nigeria.

With our industry-leading capital base, the strength and knowledge of our people and enhanced deployment of internet based technology for our operations, our company has moved closer to our goals of becoming the Number One Insurance Company in Africa and a leading player in the global insurance market.

The focus of the Board and Management will be the implementation of new initiatives that would help your company increase its profitability and market share, further diversify its operations with strategic investments and retain its crop of highly qualified professionals.

CONCLUSION
Esteemed shareholders, the performance of IGI in 2008  in spite of the difficult operating environment was made possible through the dedication, loyalty and teamwork of your Board, Management and Staff, with, of course your robust support as the owners of the company. I wish to express my profound gratitude to you.

I also wish to express my sincere appreciation to our esteemed clients, brokers and agents for their invaluable patronage, loyalty and support, and to assure them of our resolve to improve our services in the years ahead.

On behalf of the Board and Management, I thank you all for the contributions you made to the progress of our company in 2008 and for this 17th Annual General Meeting. May God bless you all and may He continue to prosper our company, Industrial And General Insurance Plc. Amen.

General Dr. Yakubu Gowon, GCFR, Ph.D, psc, jssc.
CHAIRMAN