CIC INSURANCE PROFIT UP 818 PERCENT TO KSHS. 1.4 BILLION

CIC Insurance Group has recorded 818 percent growth in net profits to Kshs. 1.44 billion for the financial year ending December 2023. The strong performance was largely attributed to the growth in insurance revenue and improved investment income during the year. Shareholders registered on the Group’s register at the close of business on 4^th June 2024 will receive Kshs. 340 million as dividends translating to Kshs. 0.13 per share.

The Group’s insurance revenue grew by 22.5 percent to Kshs. 25.4 billion in the same period under review while total assets increased by 15.6 percent to Kshs. 50.3 billion. At the same time, Assets under management (AUM) peaked to Kshs. 146 billion from Kshs. 127 billion the previous year (with no restatement of the 2022 figure as this is a non-insurance business).

In similar fashion, insurance service results grew by 242 percent to Kshs. 788.2 million from a loss of Kshs. 553.8 million experienced the previous year. Investment income return jumped by 14 percent to Kshs. 2.9 billion in the same period.

New accounting standards

These results were reported under new accounting rules dubbed International Financial Reporting Standards (IFRS) 17 that took effect last year replacing IFRS 4 which had been in existence for eighteen years. As a result, CIC restated its 2022 profit after tax to Kshs. 157.14 million from the previously reported figure of Kshs. 1.09 billion for easy comparisons under the new accounting rules.

The new accounting standard requires insurers to compute insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and uncertainties related to them.

“The restated audited financial statements are based on the new accounting standards, IFRS 17 on insurance contracts, which has been adopted by the group as of January 1, 2023. Comparative periods have been restated to reflect the application of the new accounting standard,” read part of the report.

The business maintained a growth trajectory driven by the execution of transformational initiatives focusing on customer experience, operational efficiency, digital transformation, research and innovation.

Kenyan Subsidiaries

General insurance business posted good results. Insurance revenue hit Kshs. 15.5 billion amounting to a  21 percent growth from prior year which was Kshs. 12.8 billion. Profit before tax reported a 55 percent growth to Kshs. 1.4 billion from the restated Kshs. 892 million reported in the financial year ended 2022. The company further reported a 24 percent return on equity (ROE) from 10 percent in the period under review.

CIC Life Assurance, another arm of the CIC Group reported Kshs. 6.7 billion insurance revenue being 22 percent growth from the previous year. This was occasioned by increase in new business in the year which resulted to a 33 percent growth in Group’s Credit portfolio. The profit before income tax amounted to Kshs. 1.3 billion posting 431 percent growth from prior year’s loss before tax of Kshs. 378 million.

CIC Asset Management, the arm responsible for asset management continued to thrive: The company’s assets under management (AUM) grew by 15 percent to Kshs. 146 billion up from Kshs. 127 billion in 2022. Profitability rose 10.4 percent year-on-year to Kshs. 704 million, while its customer-centric approach paid off by the 30 percent increase client base.

Regional Subsidiaries

The performance of regional subsidiaries in Uganda, South Sudan and Malawi has continued to improve performance with a contribution of 13 percent to the insurance revenue of the Group during the period. CIC Uganda insurance revenue grew by 30 percent while CIC South Sudan increased by 70 percent. By the same token, CIC Malawi grew by 19 percent. The Group has focused on its balance sheet optimization to ensure that all its core businesses are optimally capitalized.