CIC Insurance Group is pleased to report a Profit Before Tax of Kshs337 Million for half year to 30th June 2021 compared to Loss Before Tax of kshs287 Million for the same period last year. The strong performance was boosted by resilient growth in the topline and strong investment returns.
CIC Group Gross Written Premium grew by 16% to KShs. 10.8 Billion from KShs. 9.3 Billion. The strong performance was driven by growth in all businesses except South Sudan where the business was repricing to more profitable business.
Investment income grew 168% to KShs1.6 Billion from KShs. 0.6 Billion prior year due to gains in equity portfolio and unwinding of forex losses from currency translation of foreign subsidiaries.
Fund management fees grew by 41% to KShs. 400 million from KShs300 million as a result of the increase in funds under management.
Fee income and Re-insurance commission increased from Kshs. 673 Million to kshs1.1 Billion a 63% growth.
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 property market recorded a marginal growth but there were no revaluation gains or losses for the current period.
General Insurance Business. Gross Written Premium was up 16% from KShs 5.9 Billion prior year to KShs 6.8 Billion reflecting new business wins. The business recorded a profit before tax of kshs345 million compared to a loss of kshs. 190 million same period prior year.
CIC Life Assurance. Gross Written Premium grew by 9% to KShs 2.9 Billion compared to KShs 2.6 Billion prior year. In view of the life claims owing to the Pandemic, the company recorded a loss before tax of Kshs. 270 million down from a profit before tax of Kshs31 million same period prior year. Management has put mitigations in place to ensure significant improvement of the loss ratios.
CIC Asset Management.
Profit before tax increased from Kshs130 million same period last year to Kshs. 225 million mainly as a result of growth of Assets under Management by 35% to KShs. 89 billion from KShs. 66 Billion
CIC Malawi. The business continued on a growth trajectory with the gross written premium increasing by 95%.
CIC Uganda. Gross written premium grew by 50% with stable growth in investment income.
CIC South Sudan. The Company Gross written premium declined due to business attrition following repricing to more profitable business. As a result, the company recorded a profit before tax of KShs.330 million with strong investment returns registered.
Transformation journey has earnestly started across the Group with initiatives aimed at improving the business performance. Underwriting excellence continues to be the Group focus going forward to ensure that all business record underwriting profits.
The group continues to review and implement a functional structure to support achievement of the overall Group objectives. Balance Sheet re-organization 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.
Digitization- focusing on optimizing investment in digital technology mainly self-service channels and portals and upgrading all our systems with modern technology to support group objectives through faster and accurate reporting for decision-making as well as superior customer experience.
The Group has also focused on implementation of performance-based reward systems and processes such as Key Performance Indicators. This is aimed at improving staff engagement and productivity.
Other key areas of focus include, research and development as well as innovation ensuring capacity to expand our product offering and thus enhance product performance. Operational efficiency focusing on cost management, systems uptime and process re-engineering is of critical importance and a focus area by the Group.
Management will continue implementing mitigating strategies to contain the adverse effects under Covid-19 business environment to manage the expectations of all the stakeholders.
With the transformation initiatives in place some of which have been highlighted above, the CIC Insurance Group PLC will be resilient and is confident of growth and profitability in the medium to long term.
GROUP CHIEF EXECUTIVE OFFICER
10th August 2021