CIC Insurance Group posts Sh337m in profit
CIC Insurance Group posted Sh337 million pretax profit during the first six months having bounced back from a loss of Sh287 million same period last year.
The rebound was informed by improvements in performance underwriting business, higher investment income and a surge in prices of listed equities at the bourse.
These results point to a significant turnaround and improvement on key revenue lines as the business leverages leadership changes that saw appointment of the group’s Chief Executive Officer Patrick Nyaga and the recent appointment of Nelson Kuria as board chair.
According to Nyaga, there was strong performance in revenues and investment across all its business sectors including positive currency movements at its South Sudan subsidiary which soared from Sh1.2 billion to Sh2.6 billion. The group also has subsidiaries in Malawi and Uganda.
Equity portfolio gains
Investment income grew by 168 per cent to Sh1.6 billion from Sh0.6 billion the previous year, due to gains in equity portfolio and unwinding of forex losses from currency translation of foreign subsidiaries.
During that period, the group’s gross written premium soared by 16 per cent to hit Sh10.8 billion from Sh9.3 billion.
Fund management fees was up by 41 per cent to hit Sh400 million from Sh300 million, due to an increase in funds under management, same to fee income and re-insurance commission that increased from Sh673 million to Sh1.1 billion, equivalent to a 63 per cent growth.
The group’s Kenya subsidiary saw gross written premium grew by 9 per cent to Sh 2.9 billion compared to Sh2.6 billion prior year.
Life assurance business recorded a Sh270 million loss before tax, compared to a profit of Sh31 million on the back of an increase in claims owing to the Covid-19 pandemic.
“Covid-19 pandemic adversely affected the Life Assurance business with Group Life claims increasing in the period.
The company has adopted strategies to mitigate this impact as we support our clients who have been affected by the Pandemic,” the firm in the statement.
Nyaga said non-life business recorded a profit before tax of Sh345 million compared to a loss of Sh190 million same period prior year, reflecting new business wins which saw gross written premiums grow 16 per cent from Sh5.9 billion to Sh6.8 billion.
The Asset management portfolio’s profit before tax in Kenya also increased from Sh130 million to Sh225 million driven by growth of assets under management which grew by 35 per cent to Sh89 billion from Sh66 billion.
Across its subsidiaries in South Sudan, the company realised a profit before tax of Sh330 million in its gross written premium, while in Malawi it recorded a 95 per cent growth and in Uganda the growth rate was placed at 50 per cent.
Nyaga said the company is in the process of improving its underwriting processes, optimising investment in digital technology and implementing performance-based reward systems and processes such as Key Performance Indicators to improve business performance.
Other key areas of focus include balance sheet re-organization, which according to Nyaga, “is on course and aims at optimal utilization of the available resources including disposal of non-core assets and focusing on the core business for the group.”