CIC Insurance posts Sh259 million profit in half-year

CIC Insurance Group #ticker:CIC posted a Sh259.5 million net profit in the half year ended June, reversing a net loss of Sh335.5 million the year before.

The return to profitability was helped by improved performance in the underwriting business and higher investment income.

Investment and other income, including positive currency movements at its South Sudan subsidiary, more than doubled to Sh2.6 billion from Sh1.2 billion.

“Investment income saw a marked improvement and this was mainly due to unwinding of prior year’s foreign exchange losses in South Sudan and gains from our equities portfolio,” chief executive Patrick Nyaga said at an investor briefing yesterday.

Rising prices of listed equities on the Nairobi Securities Exchange contributed to the gains by lifting the value of CIC’s portfolio. The bourse is recovering from a major selloff last year that was inspired by the panic in the wake of the Covid-19 pandemic.

Safaricom and big banks such as Equity and KCB have led the market recovery as investors anticipate increased profitability and dividend payouts going forward.

CIC also gained from higher fees in its asset management business whose pool of funds jumped 35 percent to Sh89 billion in the review period.

Gross premiums rose to Sh10.7 billion from Sh9.2 billion, with the Kenyan general insurance business posting a 75 percent increase in underwriting profit to Sh447 million.

“Gross written premiums grew in all our businesses except South Sudan and for South Sudan it is because we were realigning businesses to profitable customers,” Mr Nyaga said.

Claims increased seven percent to Sh5.8 billion, partly due to a rise in benefit payouts in the life insurance business as a result of the pandemic.

Operating expenses increased 18.4 percent to Sh3.3 billion, mainly driven by provision for bad and doubtful debt in line with IFRS 9 accounting standards.