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Sunday, October 24, 2021

CIC bounces back from Sh335m loss to net Sh259m half-year profit

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CIC Group Chief Executive Patrick Nyaga.

Insurance provider CIC Group has bounced back to profitability, posting a net profit of Sh259.5 million in the first half of this year.

This was an improvement from a net loss of Sh335.5 million that the listed insurer recorded in the same period last year owing to the adverse effects of the Covid-19 pandemic.

The strong performance, said the company, was boosted by growth in its investment returns.

The insurer credited its ongoing transformation agenda with the turnaround.

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CIC recorded a considerable improvement in all key revenue lines, as the business begins to reap the benefits of recent leadership changes that saw the appointment of Patrick Nyaga as the new group chief executive and Nelson Kuria as chairman.

“With the transformation initiatives in place… CIC will be resilient and is confident of growth and profitability in the medium to long-term,” said Mr Nyaga.

During the period under review, group gross written premiums grew by 16 per cent to Sh10.8 billion from Sh9.3 billion. The strong performance was driven by growth in all businesses except in South Sudan, where the business was repriced.

Foreign subsidiaries

Investment income in the period under review almost tripled from Sh600 million to Sh1.6 billion due to gains in equity portfolio and unwinding of forex losses from currency translation of foreign subsidiaries. Fund management fees, on the other hand, grew by 41 per cent to Sh400 million from Sh300 million, as funds under management went up.

Fee income and re-insurance commission increased from Sh673 million to Sh1.1 billion, a 63 per cent growth. However, the Covid-19 pandemic adversely affected the life assurance business, with claims increasing in the period.

The company said it has adopted strategies to mitigate the adverse impact of Covid-19 on its customers.

The property market recorded marginal growth, but there were no revaluation gains or losses for the current period.

The general insurance business saw gross written premiums increase by 16 per cent from Sh5.9 billion to Sh6.8 billion, reflecting new business wins.

The business segment recorded a profit before tax of Sh345 million compared to a loss of Sh190 million same period the previous year. CIC Life Assurance’s gross written premium grew by nine per cent to Sh2.9 billion compared to Sh2.6 billion a year before.

Due to increased life claims owing to the pandemic, it recorded a loss before tax of Sh270 million in the life segment, down from a profit before tax of Sh31 million last year.

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