Mugo Kibati appointed new CEO of Pan Africa Insurance
What you need to know:
The insurance sector has in recent years recorded a wave of mergers, acquisitions and executive changes as it sought to re-align with regulatory changes that include new minimum capital requirements and shareholding thresholds.
Kibati is expected to spearhead the life insurer’s recovery and growth into the general insurance market through a planned acquisition of at least 51 per cent stake in Gateway Insurance.
The insurers rely on income from investment in the stock market, property, bonds, unit-linked and pension funds to offset any underwriting losses.
Former director-general of Kenya’s economic development blueprint Vision 2030 Mugo Kibati has been appointed the new chief executive of Pan Africa Insurance Holdings, marking his return to the corporate world.
Mr Kibati is a former CEO of NSE-listed East African Cables, which he headed for four years until his exit in June 2008. A year later he was appointed the director-general of Vision 2030, a post he held until October 2013.
He subsequently took up several appointments as a non-executive director including at I&M Bank and Lake Turkana Wind Power Project, where he is the chairman.
“The board of directors is pleased to announce the appointment of Mr Mugo Kibati as the new group CEO,” Pan Africa said in a statement.
His appointment to the helm of the financial services group has thrust him back to an active role in the dynamic and competitive private sector.
The insurance sector has in recent years recorded a wave of mergers, acquisitions and executive changes as it sought to re-align with regulatory changes that include new minimum capital requirements and shareholding thresholds.
“This appointment has been made after a rigorous recruitment exercise that sought to identify a leader to provide the necessary impetus to continue our growth and diversification.”
Mr Kibati replaces Mr Tom Gitogo who resigned from the company in September and took up an appointment as deputy group CEO at CIC Insurance.
Mr Gitogo was recently named the substantive chief executive of CIC Group following the retirement of Mr Nelson Kuria.
Pan Africa has issued a profit warning for the year ended December, citing weaker gains in its equities portfolio in the period compared to the previous year.
Mr Kibati is expected to spearhead the life insurer’s recovery and growth into the general insurance market through a planned acquisition of at least 51 per cent stake in Gateway Insurance.
Pan Africa announced last year that it intends to further increase its stake in Gateway but did not specify to what level the additional share purchase will take its interest in the insurer.
The NSE-listed firm is however expected to spend at least Sh600 million in the acquisition.
Pan Africa’s net profit grew 31 per cent to Sh295.5 million in 2013 and the profit alert means it will post earnings below Sh221 million.
Its 2013 unrealised gains on investments such as equities stood at Sh1.17 billion, having doubled. It is the first insurer to offer a preview of its 2014 earnings.
Analysts said the performance is representative of the insurance industry whose results are influenced by NSE’s.
The benchmark NSE 20 Share Index gained 3.8 per cent last year compared to 19 per cent in 2013, indicating that insurers with a large exposure at the Nairobi bourse will record lower portfolio gains that form part of their profit and loss accounts.
The insurers rely on income from investment in the stock market, property, bonds, unit-linked and pension funds to offset any underwriting losses.
They also book appreciation of share prices in firms they have invested in as unrealised or paper gains (also known as fair value gains) in their income statements.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
