CIC takes hit from lenders’ collapse

Tom Gitogo CEO CIC Insurance Group. [Wilberforce Okwiri/Standard]

The CIC Group has made large provisions to cushion itself against the effects of the collapse of two banks two years ago.

The insurer, which is owned by savings and credit cooperative organisations, Thursday said at an investor briefing in Nairobi that Chase and Imperial banks went under with much of its cash in the form of deposits and debt.

The chief executive officer, Tom Gitogo, said Imperial Bank had Sh560 million in CIC’s deposits.

The insurer also had Sh1.2 billion in Chase Bank but managed to withdraw some money.

According to Mr Gitogo, CIC had invested Sh155 million into a five-year bond that the bank had floated to raise equity.

In the case of Imperial Bank, we have made provisions in our current books covering the entire Sh560 million.

Bond maturity

“As for Chase Bank, the bond was to mature by 2022. We are doing what we call amortisation of the bond by making periodic provisions for it, which will be made fully by the year 2022, when the bond reaches its maturity. For now, out of the Sh155 million, we have made provisions worth Sh45 million,” he added.

The firm, meanwhile, recorded increased earnings of Sh478.5 million for the year ending December 31, 2017, up from the Sh188.2 million it posted the previous year.

Net earned premiums grew from Sh10 billion to Sh12.1 billion in the period under review, while investment income grew marginally from Sh1.3 billion to Sh1.5 billion.

The insurer also recorded a marginal growth in claims from Sh6.5 billion to Sh7.9 billion in the same period.

Gitogo said CIC had taken control of the Safaricom medical scheme and started operating it from April 1.