CIC Insurance reports profit drop on higher claims

Kenya’s CIC Insurance posted a 17 per cent drop in 2014 pretax profit after claims paid out increased, and said its South Sudan and Ugandan units could buoy revenue this year.

The insurer, in which Co-operative Bank is the main shareholder, said its pretax profit fell to Sh1.39 billion from Sh1.67 billion in 2013.

The claims and policy holders’ benefits paid out during the year rose to Sh8.64 billion from Sh6.02 billion.

The insurer said medical claims has risen during the year.

With insurance viewed as a potential growth sector, because of low penetration rates with less than 5 per cent of the population having any form of cover, CIC has embarked on expansion in neighbouring states.

“Our operations in South Sudan and Uganda have started off very well and we expect then to contribute to the group’s revenue growth and profitability,” the insurer said.

CIC also said its nascent operations in Malawi would start later in the year.

Investment income for 2014 rose to Sh1.05 billion from Sh722.5 million a year before, but could not counter the effect of the claims payouts on profits.

Earnings per share fell to Sh0.43 from Sh0.60 in 2013, the firm said.

The insurer said it will pay a dividend of Sh0.10 per share, unchanged from the previous year.