CIC resumes dividend on hitting Sh1bn profit

CIC Group chief executive officer Patrick Nyaga (right) with chief financial officer Philip Kimani during the release of the insurer's 2022 financial results on March 22, 2023. PHOTO | POOL

CIC Insurance Group has resumed dividend payout for the first time in four years as the net profit for the financial year ended December 2022 grew by 63 percent to Sh1.09 billion.

The growth in net earnings from Sh668.4 million in the previous financial year has returned CIC to the Sh1 billion and above net profit club for the first time in seven years.

CIC had in 2015 returned a net profit of Sh1.14 billion from Sh1.08 billion it had posted in 2014, a performance that was attributed to business realignment in general business, group life business and investment portfolio.

“The strong performance was driven by continued execution of our transformational initiatives focusing on customer experience, performance management, operational efficiency, digital transformation, research and innovation, cost competitiveness and debt management, among others,” said Patrick Nyaga, CEO at CIC Group.

The improved performance has seen the CIC board propose a payment of Sh0.13 per share dividend to shareholders, in a payout that will amount to Sh340 million.

The dividend will be paid on or about May 26, 2023 to the shareholders on the register at the close of business on May 8.

Top shareholder, Co-operative Insurance Society Limited, will receive Sh252.6 million as dividends for its 74.3 percent stake, while Co-operative Bank of Kenya chief executive Gideon Muriuki will get Sh18 million for his 5.3 percent stake.

CIC’s pre-tax profit had more than doubled from Sh959.7 million to Sh2.03 million, but the income tax expense tripled from Sh291 million to Sh936 million.

The latest tax expense is an equivalent of 46 percent of the gross earnings, a jump from 30.3 percent in 2021.

Pre-tax profit for the general insurance business rose by 35 percent to Sh872 million, with CIC attributing this to business growth, prudent underwriting and enhanced process efficiency.

The life assurance unit rebounded from a pre-tax loss of Sh79 million to Sh631 million profit, while the asset management posted a 23 percent rise in profit before tax to Sh644 million.

CIC Asset Management was managing Sh127 billion by the end of December compared with Sh94.5 billion in the previous year, giving it a market share of 40 percent.

CIC Group’s net earned premiums grew from Sh14.7 billion to Sh17.4 billion on the back of increased gross premiums.

Regional subsidiaries in Uganda, South Sudan and Malawi increased their contribution to the group gross written premium to 11 percent while their contribution to pre-tax profit was 10 percent.

The growth in premiums, added by increased interest revenue, fees and commission income, took total income to Sh22.51 billion, translating to a 17 percent growth from Sh19.2 billion.

“To maintain the growth trajectory CIC will continue investing in technology to strengthen performance and achieve customer retention in the long term,” said Mr Nyaga.

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