CIC Insurance Group will venture into real estate with a Sh2.8 billion commercial-cum-residential development on its 200 acre parcel of land in Kiambu county.
Group chief executive Mr Tom Gitogo said this was in line with the company’s plan to safeguard investor funds from the volatility of the financial markets where they had invested the bulk of their investor funds.
Mr Gitogo spoke during the investors’ briefing where he disclosed that net profits rose by 4.4 per cent to stand at Sh1.13 billion.
Mr Gitogo said that premium undercutting among insurance companies created an unhealthy environment to operate in and urged Kenyans to look at benefits when deciding on policies to buy and not on the cost of premiums.
The CIC boss added that gross premium for the 2015 period under review decreased to Sh11.4 billion compared to Sh13.7 billion in 2014 which was blamed on relieving CIC of nine of its key clients who paid handsome premium but also made the company incur heavy losses from numerous claims made.
He said CIUC Group highly welcomed the planned risk based supervision framework under review by Insurance Regulatory Authority against the current system where insurance companies only had to meet a specific minimal capitalization to be licensed.
“In future we shall have to be rated based on the amount of risks insured versus capital. We have capitalized and we shall not need to seek a cash injection to meet the new IRA requirement,” he said.
The mixed development will be launched mid this year after a property consultant currently on the ground completes his work where CIC woill largely put up high end, medium and studio apartments for entry level market on the land located next to Tatu City.
On the Uganda, Malawi and South Sudan subsidiaries, Mr Gitogo said they were still investing in the start-ups and expressed confidence that they expected to enjoy handsome returns of upto 40 per cent profits from the three units as well as from the stake in Takaful Insurance.
The insurance group with a 1.3 million customer base said it would capitalize on its co-operative distribution network to grow its new business especially on crop and livestock insurance.
CIC Group comprises of three locally registered companies, CIC Life Assurance, CIC General Insurance Limited and CIC Asset Management with 25 branches and 1,000 sales people.