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CIC Insurance Corporate Bond begins trading at the NSE

Industrialisation CS Adan Muhammed rings the bell at the NSE floor to signal the start of CIC Bond trading

The CIC Insurance Group Corporate Bond began trading at the Securities Exchange (NSE) with the insurer announcing it will take up the whole KES 6.34bn realized from the issue, which was oversubscribed by 111pc over the initial KES 3bn.

CIC Insurance Group Chairman, 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 KES 45bn by
December 2018 from KES 9bn as at December 31st record a profit before tax of Sh12.5 billion and to have accumulated net assets worth KES 30bn.

“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, 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 KES 54mn.

“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 69pc and 31pc respectively,” said Mr. Kuria.

In Uganda the CIC Africa Limited will hold 51pc 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 on 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. 2012.

“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,” said Mr. Kuria.

Speaking at the event the NSE chairman Eddy Njoroge said: “This year alone, the corporate bond market has raised KES 13.5bn. The Government of Kenya has raised and listed KES 89.1bn in Treasury Bonds.”

Mr. Njoroge said the NSE was looking forward to working with Counties Governments 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,” he said.

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.

Mr. Aden 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,” Mr. Adan said.

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