CIC Insurance Share Price definitely looks cheap at Ksh 6.35 bob but the P/E ratio of 14.7 gives it away. This is way above the industry average of 9/10. CIC is the leading micro-insurer but is this enough for it to trade at a price above its peers?
Most insurance firms are deeply invested in the stock market. The prevailing bear market has eroded the market value of listed firms. This has reduced the valuation of insurance firms. The insurance companies will have a hard time maintaining the profit growth. UAP and Britam have already issued profit warnings.
With a new CEO, we expect CIC’s loss- making medical unit to be turned around.This will stop pulling the profits down.Gross written premiums have been growing steadily due to the innovative insurance products its been rolling out. Very positive. Its regional expansion strategy is progressing well. A regional operator is always a plus.
Its three years after listing and the post-listing honeymoon is over. The net-profit growth has been flat and last year it fell. This firm needs to start showing solid results or the wolves of NSE will not continue being kind to it.
Disclaimer : The opinions expressed above are not those of CIC group.
Robert Omondi
