CIC Insurance’s earnings bounce back

CIC Insurance has made a remarkable comeback, posting a net profit of 259.5 million Kenyan Shillings in the half-year that ended in June, a significant rebound from a net loss of 335.5 million Kenyan Shillings in the previous year. The Group CEO, Patrick Nyaga, attributes this success to a strategic transformation initiative that the company embarked on over the past 12 months. Nyaga highlights that the company focused on various key areas such as enhancing customer growth, optimizing operational efficiency, and increasing investment income to drive profitability. One of the key factors driving CIC Insurance's resurgence is the focus on growing the top line by approximately 16%. This involved actively engaging with customers to expand the business and addressing legacy issues to improve retention rates. Nyaga also emphasized the importance of restructuring the organization to ensure alignment with strategic objectives, implementing performance management systems, and optimizing operational costs to enhance overall customer experience. Furthermore, CIC Insurance saw significant growth in its asset management business, with funds under management increasing from 74 billion to 89 billion Kenyan Shillings. Nyaga attributes this success to a combination of excellent customer service, prudent investments, and a digitized and efficient process that appealed to investors. Despite market volatility and challenges, CIC Insurance's asset management business thrived, underlining the company's resilience and strategic focus. Nyaga also addressed the impact of accounting measures such as IFRS 9 on the company's performance, noting that provisions for bad and doubtful debts had a significant effect on the bottom line. However, he emphasized the importance of prudent financial management and debt correction strategies to mitigate these challenges and drive long-term profitability. In discussing the company's performance in challenging markets like South Sudan, Nyaga acknowledged the risks and opportunities presented by operating in such environments. He highlighted the focus on efficiency and optimal operations as key strategies to navigate volatile markets and sustain profitability. Despite the complexities of operating in regions like South Sudan, CIC Insurance remains committed to driving efficiency and profitability in its business operations. Looking ahead, Nyaga hinted at the company's stock performance on the Nairobi Securities Exchange and potential dividend payouts. While not confirming any immediate plans for significant dividend payouts, he alluded to a positive outlook for the company's shareholders. The interview with Nyaga shed light on CIC Insurance's successful turnaround story and the strategic initiatives that propelled the company to profitability amidst challenging economic conditions.