CIC half-year profit rises 14pc to Sh343m on higher premium earnings

gitogo cic

CIC Group CEO Tom Gitogo at a past function on November 23, 2016. FILE PHOTO | NMG

CIC Insurance Group’s #ticker:CIC made Sh347.87 million net profit for the six months to June 30, a 14.53 per cent increase from a similar period last year.

The growth is largely attributable to improved premium earnings and a rebound at the Nairobi Securities Exchange (NSE), the composite insurer reported on Friday.

Gross premiums jumped by a fifth to Sh7.59 billion from Sh6.30 billion after the listed company invested in more distribution channels to make its products more accessible, Group Chief Executive Tom Gitogo told an investor briefing in Nairobi.

“After rebranding, we went through a structured process of reinvigorating the business by rationalising our product range to make them more responsive to market needs,” he said.

CIC earnings from investment and other income streams rose 53.49 per cent to Sh1.98 billion from Sh1.29 billion helped by improved performance of the NSE.

READ: Agency cuts CIC outlook to negative on weak earnings

Motor claims

The company’s net claims, however, rose 27.27 per cent to Sh4.06 billion from Sh3.19 billion the year before, the firm said, largely blamed on private motor claims.

READ: CIC Insurance regional units bleed hundreds of millions

“We are making money from motor commercial. Unfortunately, we cannot say the same on motor private,” Mr Gitogo said.

“You may have seen in the papers some relentless onslaught by garages and assessors that insurance companies are now putting their nose in the affairs of repairs, spare parts and so on.

"No amount of writings in the papers will stop us from venturing there because we are determined to start making profits from motor line of business.”

Gross written premiums from medical business, however, increased 71 per cent year-on-year in the half-year period following investment in an IT system that tracks customer data and delivers member benefit updates in real time.

Mr Gitogo said the system has given the insurer, owned 74 per cent by the co-operative movement, “control and speed over the whole decision making process” on the cost of treatment.