CIC Insurance Group is cutting some of its staff through a voluntary early retirement (VER) programme as part of a five-year (2021-2025) corporate restructuring plan.
The plan aims to improve the regional financial services conglomerate’s competitiveness, operational efficiency, and resource allocation.
In addition, it involves balance sheet re-organisation, which includes selling non-core assets, mainly land, to focus on core business—insurance and asset management.
The regional insurer, listed on the Nairobi Securities Exchange and operating in Kenya, Uganda, South Sudan and Malawi, expects to save at least 15 per cent of the annual payroll costs through the VER programme.
CIC says the savings will support its growth and expansion programmes.
“The voluntary early retirement scheme is a continuation of the functional and operational restructuring that the Group has been undertaking, now in its third year, which has sustained the growth momentum that the business enjoys,” the group says.
“The restructuring also ensures functional structure alignment to the corporate strategy in line with technological changes and digital strategies, improve productivity, increase operational efficiency, better customer services, among other benefits and ultimately improve return to shareholders.”
The CIC Group’s VER/Exit package, which affects staff in the group and its Kenyan business, was disclosed to the staff during a Staff Town Hall meeting on November 3.
CIC Insurance Group is offering voluntary early retirement to some of its staff as part of a five-year corporate restructuring plan to improve competitiveness and efficiency.
CIC Insurance Group H1’2023 Financials
The group’s net profit for the six months to June 30 more than doubled to Ksh705.45 million ($4.67 million) from Ksh263.06 million ($1.74 million) in the same period last year, with revenues from the insurance and asset management business growing by 20 per cent and 33 per cent respectively.
Operating expenses declined by three per cent to Ksh684 million ($4.52 million) as a result of prudent cost management during the period under review. Last year, its net profit jumped by 64 per cent to Ksh1.09 billion ($7.21 million) from Ksh668.43 million ($4.42 million) in 2021, with assets under management rising by 12 per cent to Ksh46.7 billion ($309.27 million) from Ksh41.54 billion ($275.09 million).
“The Group business is on a very good growth trajectory and is profitable, “the group says.
The group, which is 74.3 per cent owned by the Co-operative Insurance Society Ltd, has an ambitious five-year blueprint dubbed ‘Recapturing CIC’s Transformation Agenda’ to reclaim its market leadership position across all its lines of business—general insurance, Life assurance, and asset management.
“CIC Group will continue with the transformation initiatives aimed at growth and improving business performance. The key focus is to significantly improve the underwriting profit for all our businesses in Kenya and the region,” according to the group’s 2022 annual report.
“The Group continues to review and implement a functional structure that supports the business strategy and enhances the customer experience.”