CIC Insurance Group PLC has issued a profit warning for the 2019 financial year citing having experienced adverse claims in some of its businesses.
“The board wishes to announce that based on the projection of the remainder of the year, the net profit for the 2019 financial year is expected to be lower by more than 25% of the net profit reported for the same period in 2018,” said Gail Odongo, the company Secretary on Monday.
In its half-year results ended June, the firm posted losses with its net earnings standing at KSh20.9 million compared to KSh537 million the year before as a result of poor performance in its life insurance business segment.
In the period, claims soared eight percent to KSh5 billion while operating expenses increased 4.5 percent to KSh3.2 billion. Net premiums rose 0.4 percent to KSh7.1 billion. Investment income declined one percent to KSh1.6 billion.
However, its general insurance unit and asset management reported pre-tax profits of KSh326 million and KSh104 million respectively in the review period.
“The company has continued to register top-line growth. However, we have experienced adverse claims in some key lines of business that have significantly impacted overall group profitability,” it said in a notice.
The CIC Group comprises CIC Life Assurance Limited, CIC General Insurance Limited, CIC Asset Management Limited and Takaful Insurance Limited.
The Nairobi Securities Exchange-listed firm said details of the company’s financial position will be disclosed in the financial results announcement of the year ending 31st December 2019, to be published by the end of March 2020.
In November, the Group began the search for a new chief executive following the resignation of Tom Gitogo to provide ‘strategic direction and leadership’ for the group’s success.