CIC Insurance to Raise Funds at the Nairobi Securities Exchange

The CIC Insurance Group will raise funds through the Nairobi Stock Exchange to finance its expansion to the Eastern Africa region. And it has already started the process to list on the Nairobi Securities Exchange (NSE) by introduction.

The funds raised will increase the insurer’s share capital to Shs3bn from the current Shs1.2bn by creating 90m ordinary shares.

Shareholder Wealth

CIC Insurance Group CEO Mr Nelson Kuria, 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 organization 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.

Expansion

Recently CIC expanded to Malawi, Rwanda and Southern Sudan using funds raised through a rights issue.  The group paid up share capital currently stands at KES2.1bn and has an asset base of KES9bn.

CIC Insurance Group is the main underwriter of co-operatives in Kenya, which are the shareholders and clients of the company. It is hoped that the proposed fundraising exercise will enable the company to widen its client base and range of products and lead to higher performance levels by bring on board new shareholders and clients.

High Growth Rate

In 2010, its gross premium grew by 58% to Shs4.55bn from ShsS2.87bn 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 Shs631m from Sh277.7m. In 2011, the insurer maintained its high growth rate and gross premiums increased from Shs4.55bn in 2010 to Shs6.74bn, representing a 48% growth rate.

The Group comprises of CIC Life Assurance Ltd, CIC General Insurance Ltd, and CIC Asset Management Ltd as subsidiaries