CIC Insurance corporate bond begins trading at NSE

 

CS Adan Mohammed ringing the CIC Bond offer at the Nairobi Stock Exchange together with Nelson Kuria, CEO CIC Group (left), Japheth Magomere, Chairman CIC Group (2nd Left) and Nairobi Stock Exchange Chairman Eddy Njoroge. 

CIC Insurance Group Corporate Bond began trading at the Nairobi bourse with the insurer announcing it will take up the whole Ksh6.34 billion realized from the issue, which was oversubscribed by 111% over the initial Ksh.3 billion.

CIC Insurance Group Chairman, Mr. Japheth Magomere, said funds raised will be used to drive the company’s five-year strategic plan focusing mainly on the real estate business, regional expansion into South Sudan, Uganda and Malawi.

The funds will also be used to roll out new products targeting the micro insurance sector and recapitalize its subsidiaries.

Under the strategic plan, the insurer expects to grow its Gross Written Premiums to Sh45 billion by December 2018 from Sh9 billion as at December 31^st, 2012.Over this period, CIC Insurance expects to record a profit before tax of Sh12.5 billion and to have accumulated net assets worth Sh30 billion.

“We hope to achieve these targets through re-positioning ourselves to better tap opportunities available in the co-operatives movement and Micro-insurance sector as well as pursuing a regional expansion agenda,” said Mr. Magomere.

CIC Insurance Group CEO, Mr. Nelson Kuria said the company will expand into the region through CIC Africa Limited, by seeking partnerships with local organizations in line with the co-operatives model that the firm is pursuing.

In August this year, the CIC Africa Limited officially began operations in South Sudan where it has underwritten Gross Premiums worth more than Ksh54 million. “We are trading in the country under the banner of CIC Africa South Sudan, which is a partnership between CIC and the Co-operative Bank of South Sudan with a shareholding of 69% and 31%, respectively,” explained Mr. Kuria.

In Uganda the CIC Africa Limited will hold 51 percent shares in the new subsidiary, CIC Africa Uganda, in partnership with the Uganda Co-operatives and Savings and Credit Union Limited and Uganda Co-operative Alliance.

Uganda has over 14,000 co-operative societies which the insurer will leverage to penetrate the market and reach about 5 million cooperators. The co-operatives network in Uganda will give CIC Insurance a strong entry point which will enable the company to break even and outperform competitors by the second year.

“With oil discoveries and a natural resource base which includes agriculture and regular rainfall, Uganda is an economy that is going to explode very soon and this is the time to enter the market,” added Mr. Kuria.

Speaking at the event the Nairobi Securities Exchange chairman, Mr. Eddy Njoroge said “This year alone, the corporate bond market has raised Kshs.13.5 billion. The Government of Kenya has raised and listed Kshs.89.1 billion in Treasury Bonds”. We look forward to working with our Counties to raise funds for their development projects through issuance of county bonds. We believe that the debt markets can be used to fund flagship projects under the Vision 2030 while supporting the key pillars of the Government’s manifesto”.

Presiding over the Bell Ringing Ceremony for the corporate bond, Industrialization and Enterprise Development Cabinet Secretary, Adan Mohamed, urged local co-operatives to deal with risk management issues affecting them and to be more responsive to the needs of members.

He said insurers pursuing the co-operatives business model were best suited to cushion co-operatives against risks.

“For the co-operative enterprises their unique risk profiles cannot be met adequately by commercial insurers as the co-operative model is different from that of other business concerns,” Adan said.