CIC Insurance boss buys Sh26 million shares

CIC Insurance boss buys Sh26 million shares

The new chief executive of CIC Insurance Group #ticker:CIC, Patrick Nyaga, has bought 11.3 million shares of the company with a current market value of about Sh26 million.

Mr Nyaga, who was appointed to the position in June, appeared in the insurer’s list of top shareholders in September, according to filings seen by Business Daily.

He is now ranked sixth among the company’s top individual investors, with his share purchases seen as a signal of confidence about the firm’s future prospects.

Top executives are among a group of insiders whose stock buys are followed keenly by investors given that they have better insights into a company’s strategy, growth potential and competitive position.

Share ownership by executives is also valued as it aligns their interests with those of shareholders, especially if the managers use their own money to buy the shares in the open market.

Mr Nyaga has been tasked with turning around CIC’s performance which has recently been defined by losses and indebtedness.

He was hired from Co-op Bank where he was the finance and strategy director and was among the executives credited with the ascent of the lender that overtook storied rivals like Standard Chartered Bank Kenya to rank third in terms of absolute earnings.

Co-op Bank, which has a 24.8 percent indirect stake in CIC, says it has confidence that Mr Nyaga will steer the insurer back to profitability.

“Patrick is a strong transformational leader and he will be of great impact to the performance of CIC Insurance,” Co-op Bank said in a statement.

CIC says it is currently focused on better pricing of its insurance policies to reflect the assumed risks besides lifting the performance of its regional subsidiaries.

The insurer made a Sh335.5 million net loss in the half year ended June, reversing a net profit of Sh20.9 million the year before.This came as investment income fell 25.9 percent to Sh1.2 billion in a period when the Covid-19 pandemic pulled down share prices on the Nairobi bourse and returns on fixed income investments like bank deposits and T-bills declined.CIC has moved to sell 712 acres of its freehold land in transactions expected to earn it substantial gains.The company has not revalued the land holdings on which it had initially planned to build residential properties. Part of the cash is expected to be used in reducing its borrowings.

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