CIC net profit up 138pc on increased investment income
CIC Insurance has reported a 137.6 per cent jump in profits after tax to Sh1.38 billion for last year on the back of growth from investments and improved underwriting. Photo/File
CIC Insurance has reported a 137.6 per cent jump in profits after tax to Sh1.38 billion for last year on the back of growth from investments and improved underwriting.
The insurance group’s investment income grew by 169 per cent to stand at Sh1.4 billion mainly due to the prevailing high interest rates and diversification through investment in property market.
Its gross premiums written in 2012 increased by 34 per cent to stand at Sh9 billion.
The company, which listed on the Nairobi Securities Exchange (NSE) last year, has invested more than a billion shillings in real estate over the last two years as it seeks to boost revenue from one of the fastest growing sectors.
The company indicated on the information memorandum prior to its listing that the entry into the property market was part of the group’s future outlook, and has recently acquired 400 acres of land in Isinya for property development targeting the middle class.
In the statement announcing the financial results, it notes that board of directors has approved an expansion plan into South Sudan and Uganda, as it seeks to diversify investment strategies through regional expansion, micro insurance, and new channels of distribution.
CIC plans to enter the South Sudan market through the creation of a new subsidiary, acquiring 69 per cent of the issued capital of the new entity.
“The board of directors resolved to invest into South Sudan which will result in the creation of a new subsidiary. The company will acquire 69 per cent of the issued capital of the entity to be established in South Sudan in collaboration with Cooperative Bank of South Sudan who will hold the remaining 31 per cent,” said CIC Insurance in a statement.
In Uganda, CIC Insurance is seeking a partnership with Uganda Cooperatives Savings and Credit Union to jointly establish an insurance company, with a 40 per cent shareholding.
The company has recommended dividend payout of Sh0.10 per share, an increase of 11 per cent from the previous year.
Other highlights: • Claims incurred grew by 47 per cent to Sh4.6 billion. The overall loss ratio is however within the industry average. • Commission expenses grew by 15 per cent to Sh641 million, in line with the premium growth. • Management expenses rose by 30 per cent to Ksh 1.9 billion, largely driven by the high inflation environment.
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Note: The results are not exact but very close to the actual.
