CIC Insurance Group #ticker:CIC has posted 33.1 percent decline in net profit to Sh321.6 million for the year ending December 2019 on account of increased claims.
This is a three-year low earnings for the Nairobi Securities Exchange-listed insurer that had posted a profit of Sh480.94 million in 2018.
Total income grew marginally by three percent to Sh17.6 million but claims expenses rose 6.2 percent to Sh10 billion reducing the bottom-line. Total expenses rose from Sh16.4 billion to Sh17.2 billion.
“The group registered a decline in profit due to higher year-on-year growth in claims expenses by six percent due to adverse experience in key business lines,” the insurer said.
Growth in top-line was further blunted by a drop in investment income due to poor performance of the equities market coupled with a slump in revaluation gains on property investments.
The performance is a departure from the resilience experienced the previous year when it became the only listed insurer to post a growth in the bottom-line as the industry returned its worst performance in 12 years.
CIC had last year issued a profit warning, preparing investors for a more than 25 percent decline in earnings.
Directors have frozen dividends on the back of the declined earnings. This is in contrast with last year when it paid Sh0.13 per share, amounting to Sh340 million.
Former chief executive Tom Gitogo quit his position on October 9 last year, cutting short his contract that was set to expire last February.
The board picked Elijah Wachira to hold the position in an acting capacity.
“The group’s key areas of focus shall include improved customer experience, reliable and user friendly systems and prudent cost management by focusing on innovation and continuous improvement,” the board says.