CIC Insurance Group Patrick Nyaga (left) having a word with Co-op Bank Chief Executive Gideon Muriuki at a past event. FILE PHOTO | NMG CIC Insurance Group 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 Securities Exchange and returns on fixed income investments like bank deposits and T-bills.
The insurers’ bottom-line was also hurt by a 7.6 percent rise in claims to Sh5.4 billion. Its net premiums was flat at Sh7.1 billion. CIC’s operating expenses dropped 10.7 percent to Sh2.8 billion while finance costs declined 10.1 percent to Sh302 million.
The company’s borrowings rose marginally to Sh3.77 billion but refinancing of part of its debt at lower rates helped it save on interest expenses.
The insurer last year redeemed its Sh5 billion bond (which had a 13 percent coupon) using a mix of internal cash flows and a Sh4.5 billion loan from Co-op Bank obtained at an interest rate of 12.5 percent.
Co-op Bank owns a 24.8 percent stake in the insurer with which they share the model of serving saccos as their main customer base. CIC had initially planned to settle the bond using proceeds from sale of its 712 acres of freehold land but the proposed disposals are yet to be completed.