This archive report was first published on 30 July 2019.
On June 30th, 2019, CIC Group, a leading financial services company, released its half-year financial results, revealing a staggering 96 percent drop in net profits compared to the same period in 2018.
According to the company's statement, the significant decline in profits can be attributed to costly life insurance claims incurred during the period. However, CIC notes that these high claims are not expected to recur in the future.
Despite the decline in profits, CIC's net claims and policyholder benefits grew by 8 percent, from KSh4.7 billion in the first half of 2018 to KSh5 billion in the first half of 2019. In contrast, net earned premiums increased marginally by 0.4 percent, from KSh7.083 billion to KSh7.112 billion.
The company's operating expenses also saw a 5 percent increase, reaching KSh3.2 billion. CIC's general business contributed the largest share of gross written premiums, accounting for 63 percent, while the life business contributed 27 percent. Regional subsidiaries added 10 percent to the company's gross premiums.
Given the current financial performance, CIC is likely to issue a profit warning for its full-year results unless it makes significant earnings in the second half of 2019. To boost its financial results, the company is exploring the sale of 712 acres of land in Kiambu and Kajiado counties, valued at an estimated KSh10 billion.
