CIC Insurance Group has issued a profit warning for the year ended December 2025, anticipating its net income to fall by at least 25 percent in the absence of a one-time investment property gain and higher claims.
The Nairobi Securities Exchange-listed firm had posted a net profit of Sh2.85 billion the year before, when its performance was boosted by a Sh1 billion gain from the revaluation of its Kiambu land.
The insurer said there was no similar gain in the subsequent year when it also incurred higher claims from policyholders, resulting in the lower profit forecast.
The profit warning means that the company is expecting a maximum net profit of Sh2.14 billion in the review period.
"The anticipated decline in profitability is primarily driven by non-recurrence of a significant one-off gain recognised in 2024 financials and elevated claims," CIC said in a statement.
"In addition, the group experienced elevated claims during the period, which reflects normal volatility within the insurance cycle and remains within expectations."
The value of the company's Kiambu land rose to Sh5.05 billion in January 2024 from Sh4.04 billion in December 2023, resulting in the one-time Sh1 billion gain as the insurer progressed in its efforts to sell the asset.
CIC recently announced it had raised Sh1.8 billion from the sale of 150 acres in Kiambu and Kajiado counties, boosting its liquidity and unlocking gains from its portfolio of investment properties.
The insurance company said it sold 50 acres of land adjacent to Tatu City in Kiambu and 100 acres in Kajiado.
"The two transactions will inject Sh1.8 billion into the balance sheet of CIC Insurance Group PLC, further strengthening the liquidity and overall performance of the Group," the insurer said in a statement.
CIC had invested heavily to establish a major land bank, preparing to develop commercial and residential units even as it benefited from the long-term appreciation of land in areas close to the capital, Nairobi.
Before the latest land sales, its portfolio of investment properties included 200 acres in Kiambu and 495 acres in Kajiado.
The decision to sell the assets came after the insurer's borrowings increased, while the land parcels were not generating cash as they remained undeveloped.
CIC, for instance, took a Sh4.5 billion loan from its significant shareholder, Co-operative Bank of Kenya, to help repay its Sh5 billion corporate bond on October 2, 2019.
The loan from Co-op Bank had grown to Sh5.2 billion at the end of 2024, reflecting the impact of the accumulation of interest and restructuring of the debt as the lender accommodated the insurer to help it get back on its feet.
"We will use the money to reduce the debt, which means our finance costs will come down significantly and the balance sheet structure will be improved," said CIC Chief Executive Patrick Nyaga.
“We have been selling quarter blocks, so getting one buyer and making a bulk payment to the loan is a big breakthrough,” he added.
