CIC Insurance Group has posted a 0.64 percent increase in net profit to Sh709.99 million for the half year ended June 2024, with the pace of profit growth slowed by higher operating and tax expenses.
The increase in net profit from Sh705.45 million in the corresponding period last year was driven by a 21.4 percent rise in insurance services income -- net revenue from underwriting business -- to Sh1.05 billion.
Net investment income, which is money received from investments such as government securities, fixed deposits and property, fell from Sh690.2 million to Sh681.1 million, mainly due to a 79.8 per cent increase in net finance expenses from insurance contracts to Sh1.29 billion.
Investment income grew by 35.6 percent to Sh1.79 billion while income from asset management services increased by six percent to Sh604.1 million.
Other operating expenses increased from Sh683.6 million to Sh730.07 million, while finance costs related to loan servicing increased by 31.7 percent to Sh321.7 million.
Profit before tax rose by 7.2 percent to Sh1.28 billion, but higher tax expenses of Sh569.34 million or 44.5 percent of gross profit slowed net profit growth. CIC had paid Sh488.3 million or 40.9 percent of gross income as tax in the corresponding period last year.
The Nairobi Securities Exchange-listed group, which has operations in Kenya, Uganda, South Sudan and Malawi, last month paid a dividend of Sh0.13 per share after posting a record net profit of Sh1.44 billion for the year ended December 2023.
The record profit was the first full year under new accounting rules called International Financial Reporting Standards (IFRS) 17, which replaced IFRS 4 in January last year. IFRS 4 had been in use for 18 years.
The net profit of Sh1.44 billion surpassed the previous record of Sh1.14 billion that CIC posted in 2015, a performance attributed to the repositioning of its general business, group life business and investment portfolio in that year.
Sanlam Kenya was another insurer with improved performance last week. It posted a net profit of Sh282.2 million for the half year ended June 2024, compared to a net loss of Sh171.95 million in a similar period last year.
Sanlam will be looking for its first full-year profit in four years after its loss widened by 52.6 percent to Sh126.6 million in the year ended December 2023.​