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Companies

CIC Insurance targets Ethiopia in regional expansion strategy

Chief Executive Officer Tom Gitogo
Chief Executive Officer Tom Gitogo. FILE PHOTO | NMG 

CIC Insurance Group says it is eyeing entry into Ethiopia, Tanzania and Rwanda as the firm seeks to increase its footprint in the Eastern and Central African region.

Chief Executive Officer Tom Gitogo told the Business Daily that the insurer was keenly following Prime Minister Abiy Ahmed’s administration’s efforts to free up the country’s financial sector that has for decades been under State control.

The firm’s planned entry would increase its countries of operation to seven, including Kenya. Currently, the insurer is present in Uganda, Malawi and South Sudan.

“We are considering Ethiopia but the financial services liberalisation in that country still has some way to go. We are monitoring keenly,” Mr Gitogo said.

Currently, the Ethiopian government has total control over sectors such as telecommunications, and prohibits foreign ownership of banking, insurance and financial services firms, effectively shutting out local and private investors. MrAhmed has introduced incentives such as tax holidays and subsidised loans since taking over in April last year as part of efforts to loosen up the State’s grip on the economy.

CIC’s looming venture into Ethiopia, Tanzania and Rwanda is expected to boost the insurer’s profit margins even as the firm recorded improved performance in the year ended December 2018. The firm’s net profit rose 31 percent to Sh625 million.

Other local firms that are eying Ethiopia include telecoms giant Safaricom and Kenya’s two biggest lenders —KCB and Equity Bank.

The banks have signalled plans to enter the horn f Africa country via acquisition of local entities.

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