Login to your account

Username *
Password *
Remember Me

CIC Insurance Group (NSE:CIC) has issued a profit warning, preparing investors for a more than 25 percent decline in earnings in the year ending this month due to increased claims.


This means that the Nairobi Securities Exchange-listed insurer will post a net profit of below Sh469 million, compared with the earnings of Sh625.3 million booked in the previous financial year.


“The company has continued to register top-line growth. However, we have experienced adverse claims in some key lines of business that have significantly impacted overall group profitability,” the company’s board said in a notice.

The performance is a departure from the resilience experienced last year when CIC became the only listed insurer to post a growth in the bottom-line as the industry returned its worst performance in 12 years.


The company’s net profit in the half-year ended June dropped 96 percent to Sh20.9 million compared to Sh537 million the year before. This was driven by major losses in the life insurance business.

 

Claims rose eight percent to Sh5 billion while operating expenses increased 4.5 percent to Sh3.2 billion, hurting the bottom-line in the period when net premiums and investment income were flat.


Data from the Insurance Regulatory Authority show that CIC Life’s claims settlement ratio –a measure of the number of claims that the insurer has paid over the number of claims filed by the insured— averaged above 53 percent between January and September.


The ratio was 55.3 percent in the first quarter and dropped to 45.9 percent in the second quarter before shooting to 58.3 percent in three months to September.


CIC is undergoing a transition at the top with Tom Gitogo having quit his position as CEO on October 9, cutting short his contract that was set to expire in February next year.


The company did not disclose the reasons for this even as the board settled on Elijah Wachira to hold the position in an acting capacity.

 

  • Africa Investor Summit 2018
    https://www.african-markets.com/images/ju_cached_images/AIS2018-Square_411ad77434821170d1f5e8960525d272_90x50.resized.jpg

We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Use.