Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Press Releases: CIC Insurance Group to List at NSE by Introduction

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Kenya: Press Releases: CIC Insurance Group to List at NSE by Introduction

Monday, 16 January 2012

Nairobi, 16 January 2012 --- CIC Insurance Group has started the process to list on the Nairobi Securities Exchange (NSE) by introduction as it seeks additional capital to fund its regional expansion strategy.

The insurer has appointed Faida Investment Bank Ltd as the lead transaction advisor, Oraro & Company Advocates as the legal advisor and Kingdom Securities as the sponsoring stock broker. Deloitte and Touche will act as the reporting accountants and Co-operative Bank of Kenya Ltd as share registrars. Gina Din Corporate Communications and Nuturn Ltd will be the public relations and advertising consultants respectively.

The group shareholders had early last year resolved to increase the insurer’s share capital to KES3bn from KES1.2bn by creating 90m ordinary shares during the firm’s 33rd AGM held at a Nairobi hotel.

Mr Nelson Kuria, CIC Insurance Group CEO said the company had opted to list its shares by introduction as opposed to an IPO owing to the current bear run that has eroded share value at the NSE. "We have a responsibility to safeguard our shareholder wealth and our risk analysts have advised the organisation that this is not the apt timing for an IPO,” said Kuria. “Were it not for the bear market, our shareholders had already passed a resolution to raise additional share capital by listing at the NSE in the first quarter of this year, subject to approval by pertinent regulatory bodies,” said Kuria.

The group paid up share capital currently stands at KES2.1bn and has an asset base of KES9bn. Funds realised through the recent rights issue will mainly go towards expanding to Malawi, Rwanda and Southern Sudan, where the firm plans to partner with the local co-operatives and church based organisations rather than opening new subsidiaries.

CIC Insurance Group is the preferred underwriter of the co-operative movement in Kenya, who double up as shareholders and clients of the company. The future prospects of the overall business of CIC Insurance Group look promising. The wide range of products on offer, the rigorous marketing and sales campaign to the co-operative movement have started to yield very good results as evident in the financial results.

It is hoped that the proposed fundraising exercise, bringing on board many new shareholders, will enable the company to widen its client base and range of products and lead to higher performance levels.

In 2010 the company changed its name to CIC Insurance Group Limited. This change was in preparation for the demerger of its life and general business operations. By the end of last year, the company had fully demerged to form CIC Life Assurance Ltd, CIC General Insurance Ltd, and CIC Asset Management Ltd as subsidiaries.

After sustained high annual growth rate of over 25% in the last decade, CIC insurance Group is now focusing on maintaining its growth momentum through product innovation, use of nonconventional distribution channels and accessible payment platforms aimed at the mass market and tapping the microinsurance niche.

In 2010, its gross premium grew by 58% to KES4.55bn from KES2.87bn in 2009. By the end of 2010, the company occupied position three out of 46 insurance companies in Kenya. Profit before tax grew by an impressive 127% to KES631m from KES277.7m. In 2011, the insurer maintained its high growth rate and gross premiums increased from KES4.55bn in 2010 to KES6.74bn, representing a 48% growth rate.

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