Financial services company CIC group has posted a 96 percent drop in net profits in the half year period that ended on 30th June. The firms profit after tax for the six months declined from KSh537 million in 2018 to KSh20.9 million in 2019.
CIC attributes the huge decline to costly life insurance claims incurred during the period. In a statement to the media, CIC noted that the high life insurance claims are not expected to recur. The insurer’s net claims and policy holder benefits grew by 8 percent from KSh4.7 billion in the half year of 2018 to KSh5 billion in the half year of 2019. In contrast, net earned premiums increased marginally by 0.4 percent from KSh7.083 billion to KSh7.112 billion. The company posted a 5 percent increase in operating expenses to KSh3.2 billion.
CIC’s general business contributed the largest share of gross written premiums at 63 percent while the life business contributed 27 percent of the gross written premiums. Regional subsidiaries added 10 percent to the company’s gross premiums.
The company is likely to issue a profit warning for the full year results unless it makes huge earnings in the second half of 2019. Business Daily reports that the insurer is looking to sell 712 acres of land in Kiambu and Kajiado counties at an estimated price of KSh10 billion. If the deal sails through during the second half of the year, it will boost CIC’s full year financial results.
