CIC gets nod for three new subsidiaries in growth drive

CIC Group CEO Patrick Nyaga (left) and CIC General Insurance Managing Director Fred Ruoro at a past event. 

Photo credit: Billy Ogada | Nation Media Group

CIC Insurance Group shareholders have approved the creation of three new subsidiaries, including a pharmaceutical company, a micro-insurance arm, and a Ugandan asset management firm as part of a business expansion drive by the insurer.

The resolutions were passed during an annual general meeting last Friday.

The Nairobi Securities Exchange-listed insurer plans to establish a micro-insurance subsidiary dubbed CIC Micro Insurance Limited following authorisation from shareholders.

“That the incorporation and establishment of CIC Micro Insurance Limited as a wholly-owned subsidiary of CIC Insurance Group Plc, having such authorised, issued, and paid up capital as the board may determine from time to time, be and is hereby ratified, confirmed, and approved,” read the annual report.

CIC had earlier launched a micro-insurance product focusing on livestock farmers.

The livestock micro insurance policy was first launched in 2009, as a cattle mortality cover for low-income dairy farmers shielding them from financial losses.

The listed insurer disclosed in the latest annual report that the group plans to venture into the pharmaceutical business with the newly established CIC Pharmacy Limited, which will be a wholly owned subsidiary of CIC Group.

The group also is establishing an asset management firm in Uganda as a subsidiary of CIC Africa (Uganda).

The insurer provides financial services in Kenya, Uganda, South Sudan, and Malawi offering general, life insurance, medical assurance, and asset management services.

CIC invested Sh4.29 billion in subsidiaries in the year ended December 2023.

The group spent about Sh50 million on the new CIC micro insurance limited in the year ended December 2023.

The insurer had invested Sh779.3 million in CIC Africa Uganda Limited towards the asset management firm.

CIC maintained a Sh0.13 per share dividend amounting to Sh340 million after posting a record Sh1.44 billion net profit for the year ended December 2023.

This was the first full year of profit under the new accounting rules dubbed the International Financial Reporting Standards (IFRS17) that replaced IFRS4 in January.

The new standard demands that insurers measure insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to insurance contracts.

IFRS 17 accounting integration and allocations require considerable changes to reporting and disclosures that are driven by data and modelling inputs.

These also need actuarial modelling integration and the accounting ledger and must include control audit, and reconciliation.

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