CIC Insurance sets July 19 stock exchange listing date

CIC Insurance is set to list on the Nairobi Securities Exchange (NSE) on July 19.

The insurer had initially set this Tuesday as the launch date for trading at the bourse, but was forced to postpone the plans after the deaths of Internal Security minister George Saitoti and his assistant Orwa Ojode put into doubt the availability of senior government officials who were expected to officiate the listing.

“We can confirm that we will be listing on July 19,” said CIC Insurance corporate affairs and communications assistant general manager, Michael Mugo.

CIC’s ordinary shares numbering nearly 2.2 billion will be listed at Sh3.50 each on the Main Investment Market Segment, giving it a market capitalisation of at least Sh7.7 billion on its debut at the exchange.

The shares will be listed by introduction, which does not involve selling any shares to the public.

The listing will make CIC Insurance the seventh listed insurer and the second firm to list this year after Longhorn Kenya’s listing in early May.

British American, Jubilee, CFC Insurance, Kenya Re and Pan Africa Insurance are the other listed insurers on the NSE.

CIC Insurance has said that the Kenyan insurance industry is characterised by many firms all fighting for a small market, which is putting competitive pressure on the players.

“There is a lot of undercutting in the business and this has become the order of the day,” said CIC Insurance chief executive Nelson Kuria at a pre-listing briefing earlier in the month.

Industry data shows that penetration of insurance services is still low at 3.10 per cent as at the end of 2010.
Mr Kuria said that to grow revenues CIC Insurance will be going for the mass market, which mainly comprises of the informal sector.

Other growth areas planned are countries in the Comesa markets and the real estate industry. Analysts said that the general business for most insurers similar to CIC is “strong.” Focus is however on the investment side, which is vulnerable to interest rates and inflation.

“In the last couple of weeks we saw interest rates turn and start climbing in tandem with inflation numbers,” said Mr Nderi.

The inverse relationship between rates and asset values means that as rates increase, asset values will drop.
CIC Insurance held Sh2.47 billion in government securities as at the end of 2011. Prior to the listing, CIC’s shares have been trading on the over-the-counter market since 2009.