CIC market value rises by 50 pc
Posted Wednesday, July 18 2012 at 19:57
The stock of CIC Insurance — which listed at the Nairobi Securities Exchange (NSE) on Wednesday — is likely to grow steadily if the company continues its foray into the underserved micro-insurance segment.
Analysts said the market would look at whether the insurer can sell products successfully to the mass market, which has a huge headroom for growth.
“CIC is in an industry that has immense potential contingent on Association of Kenya Insurers success in educating the public about insurance,” said Moses Waireri, a research analyst at Genghis Capital.
Also read: CIC reveals Sh1 billion property investments
The CIC shares traded only for one hour yesterday, a period which analysts said was too short to determine whether a fair price for the company had been realised.
During the trading, soon after President Mwai Kibaki rang the bell, the shares touched a high of Sh7, but oscillated between Sh5 and Sh4.
They closed at an average price of Sh5.25 with 1.62 million shares exchanging hands. The firm was introduced to the market at Sh3.50 per share.
The closing price raised the company’s market capitalisation from Sh7.7 billion to Sh11.55 billion with 2.2 billion shares issued, representing a 50 per cent gain.
Insurance penetration in Kenya stands at three per cent with the majority of the uninsured being in the informal sector — artisans, small-scale farmers and micro, small and medium enterprises.
CIC Insurance chief executive Nelson Kuria said the insurer wants to strategically position itself in the micro-insurance segment.
“We are able to insure hawkers and Jua Kali workers in places like Gikomba and we have products for this market,” he said.
The firm has insurance products that retail at Sh10 per day for life and accident cover.
Analysts expect the informal insurance market which has proven a winner for banks to have the same impact on insurers such as CIC.
Listing documents show that the company has maintained a compounded average growth rate of 62 per cent in the last five years riding on the co-operative movement.
One in four Kenyans belongs to a co-operative, Sacco or a savings group and CIC Insurance plan is getting these members to take up one form of a cover.