18th August 2017
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Company Data
 
CIC Insurance Group Limited
http://cic.co.ke/
Par Value:                  
Closing Price:           6.10
Total Shares Issued:          2615538528.00
Market Capitalization:        15,954,785,021
EPS:             0.43
PE:                 14.186
 

CIC is the leading provider of micro insurance and other financial services

H1 Gross written premium 7.585498b vs. 6.298655b +20.430%
H1 Net earned premiums 5.877926b vs. 5.039137b +16.645%
H1 Investment and other income 1.975345b vs. 1.286288b +53.569%
H1 Total income +24.154%
H1 Net claims and policyholder benefits [4.056777b] vs. [3.189560b] +27.189%
H1 Operating and other expenses [2.917182b] vs. [2.330789b] +25.159%
H1 Loss on net monetary position [124.681m] vs. [133.921m] -6.900%
H1 Total expenditure [7.098640b] vs. [5.654270b] +25.545%
H1 Profit before tax 429.508m vs. 335.385m +28.064%
H1 Profit for the period 347.872m vs. 303.731m +14.533%
EPS 0.13 vs. 0.12 +8.333%
Total Equity 7.561451b vs. 7.479463b +1.096%
Cash and cash equivalents at 30th June 4.371649b vs. 4.379452b -0.178%

Company Commentary
Financial Highlights
Gross written premiums increased commendably by 20% as our strategy on diversification takes hold.
Investment and other income increased by 54% partly because NSE investments have begun to recover.
Profit before Tax +28%
Uganda business is on track
South Sudan hyper inflationary
Efforts continue to grow the business in Malawi

Conclusions

Dash for growth with a +20.43% gross written premium
Rebounding Listed share portfolio at the NSE.
however there is always a strong H2 skew which tends to make 1 statistically 1/4 of the FY Earnings

FY Gross written premiums 12.334289b vs. 11.439541b +7.822%
FY Gross earned premiums 11.745036b vs. 12.638444b -7.069%
FY Reinsurance ceded [1.713735b] vs. [1.909518b] -10.253%
FY Net earned premiums 10.031301b vs. 10.728926b -6.502%
FY Investment income 1.287790b vs. 1.537813b -16.258%
FY Total income 13.060879b vs. 13.826552b -5.538%
FY Claims and policyholders benefits expense [6.469473b] vs. [7.283698b] -11.179%
FY Commissions expense [1.538723b] vs. [1.379772b] +11.520%
FY Operating and other expenses [4.649528b] vs. [3.823833b] +21.593%
FY Total expenses [12.955203b] vs. [12.487303b] +3.747%
FY Profit before taxation 114.388m vs. 1.339086b -91.458%
FY Profit for the year 188.185m vs. 1.136604b -83.443%
FY Forex loss on translation [256.411m] vs. [282.179m] -9.132%
EPS 0.07 vs. 0.43 -83.721%
Cash and cash equivalents at 31 12 4.379452b vs. 4.567893b -4.125%
Total assets 26.826687b vs. 24.920235b +7.650%
Total equity 7.479463b vs. 7.830483b -4.483%
Dividends 0.105 share vs. 0.105 share

Company Commentary

Profit of the Group was adversely impacted by

1. Depressed NSE prices resulting in further unrealised losses of 143m
2. Change in reserving methodology by IRA which increased our life Business reserves by 704m
3. Aggressive provisioning of debtors in our General Insurance Business resulting run an additional 326m provision
4. loss of 297.5m following hyper inflation reporting in South Sudan as a result of SSP devaluation
5. 89m loss from school fires i 2016

Maintaining Dividend

Conclusions

Soft results.

H1 Gross written premium 6.263928b vs. 6.931171b -9.627%
H1 Net earned premiums 5.026669b vs. 5.621921b -10.588%
H1 Investment income and other gains 1.242137b vs. 1.588156b -21.787%
H1 Total income 6.268806b vs. 7.210077b -13.055%
H1 Net claims and policy holders benefits [3.190323b] vs. [4.300161b] -25.809%
H1 Operating and other expenses [2.343671b] vs. [2.332058b] +0.498%
H1 Total expenditure [5.533994b] vs. [6.632219b] -16.559%
H1 Finance cost [325m] vs. [325m]
PBT 399.042m vs. 269.284m
Profit for the period 367.388m vs. 209.370m +75.473%
EPS 0.14 vs. 0.08 +75.000%
Total equity 7.618112b vs. 7.160747b +6.387%
Cash & cash equivalents at the end of the period 4.479876b vs. 2.216997b +102.070%

Company Commentary

Gross premium income declined by 10% pursue quality of quantity business
Claims incurred declined by 26%

Conclusions

Big drop in claims incurred juiced H1 EPS

CIC Insurance Group Limited FY 2015 through 31st December 2015 vs. 31st December 2014
FY Investment properties 5.420742b vs. 4.596000b +17.945%
FY Government securities 3.213601b vs. 2.503013b +28.389%
FY Equity investments 1.075779b vs. 0.377619b +184.885%
FY Deposits with financial institutions 4.842340b vs. 7.476940b -33.910%
FY Total assets 24.813856b vs. 23.690387b +4.742%
FY Gross written premiums 11.439541b vs. 13.721376b -16. 630%
FY Gross earned premiums 12.638444b vs. 13.363942b -5.429%
FY Less reinsurance ceded [1.909518b] vs. [1.053618b] +81.234%
FY Net earned premiums 10.728926b vs. 12.310324b -12.846%
FY Total income 13.826552b vs. 14.519875b -4.775%
FY Claims and policyholders benefits expense [7.283698b] vs. [8.641875b] -15.716%
FY Commissions expense [1.379772b] vs. [1.138843b] +21.156%
FY Operating and other expenses [3.823833b] vs. [3.356525b] +13.922%
FY Profit for the year 1.136604b vs. 1.088440b +4.425%
FY Forex loss on translation [282.179m] vs.
EPS 0.43 vs. 0.42 +2.381%
Dividend 0.105 versus 0.10
Cash and cash equivalents at 31st December 4.806290b vs. 2.442026b +96.816%

Company Commentary

Gross earned premium decreased by 5%
Total Assets +5.00%
The Twin devaluation of both equities quoted on the NSE and bonds marked to market also had an impact on previously expected investment income
Our gross earned premium dropped by 5% largely due to a deliberate strategy to streamline our medical business as well as our group life business which saw a number of large loss making accounts exit our portfolio

Conclusions

Fully priced

CIC Reports H1 2015 Earnings through 30th June 2015
First Half Gross Written premiums 6.931171b versus 5.913766b +29.37%
First Half Investment and Other Income 1.263156b versus 538.742m +134.46%
First Half Total Income 6.885077b versus 6.491223b
First Half Net claims and policy holder benefits [4.300161b] versus [4.501004b]
First Half Operating and other Expenses [2.332058b] versus [1.834373b]
First Half Total Expenditure [6.632220b] versus [6.335377b]
First Profit before Tax 269.284m versus 154.360m +74.45%
First Half EPS 0.08 versus 0.06 +33.33%

Conclusions

CIC always reports a strong H2 Earnings Skew.

CIC reports FY 2014 Earnings versus FY 2013
Full Year Total Assets 23.690387b versus 17.035817b +39.0622%
FY Deposits with Financial Institutions 8.542103b versus 3.343407b +155.49%
Full Year Gross written premiums 13.721376b versus 11.061282b +24.0486%
FY Net earned premiums 12.310324b versus 9.155682b +34.455%
Full Year Investment Income 1.051816b versus 722.466m
Full Year Total Income 14.519875b versus 10.887100b +33.367%
Full Year Claims and policyholders benefits expense [8.641875b] versus [6.020059b] +43.55%
Full Year Operating and other Expenses [3.356525b] versus [2.351499b] +42.73%
Full Year Total Expenses [13.137243b] versus [9.215110b] +42.561%
Full Year Profit before Tax 1.390314b versus 1.671095b -16.8%
Full Year Profit After Tax 1.088440b versus 1.304559b -16.565%
Full Year Earnings Per Share 0.43 versus 0.60 -28.333%
Final Dividend 10cents a share

Company Commentary

PBT declined by 17% mainly due to increase in claims [particularly in our medical business] and policyholders benefit costs.
The Group is currently undertaking a business transformation exercise
Our Operations in Uganda and South Sudan have started off very well
Operations in Malawi expected to start later this year

Conclusions

Looks expensive now on a PE Ratio of 23.953.
However, growing its Foot Print regionally.

First Half Earnings through 30th June 2014 versus through 30th June 2013
First half Net Earned premiums 5.952481b versus 4.488731b +32.609%
First Half Investment and Other Income 538.742m versus 537.423m
First Total Income 6.491223b versus 5.026154b +29.148%
First Half Net Claims and policyholders benefits [4.501004b] versus [3.396047b] +32.536%
First Half Operating and other expenses [1.834373b] versus [1.537809b] +19.284%
First Half total Expenditure [6.335377b] versus [4.933856b] +28.406%
First Half Profit Before Tax 154.360m versus 92.298m +67.24%
First Half Profit after Tax 138.348m versus 34.850m +296.98%
First Half Earnings Per share 0.06 versus 0.02 +200%

To sustain the growth momentum,the group is pursuing regional expansion, micro insurance, new channels of distribution and investment diversification strategies.

Conclusions

There is a second Half Bias in CICs results.
Whilst Profit before Tax surged +67.24% even after that surge H1 EPS represented 8.95522% of FY 2013 EPS.
FY Earnings through 31st December 2013 versus FY Year through 31st December 2012
Gross Written Premiums 11.061282b versus 9.009893b +22.768%
Gross Earned Premiums 9.155682b versus 7.288180b
FY Total Income 10.887100b versus 8.901993b +22.299%
OUTGO
Net Claims and policyholder benefits [6.020059b] versus [4.644801b]
Operating and other Expenses [2.351499b] versus [1.956564b] +20.185%
TOTAL OUTGO [9.215110b] versus [7.242665b] +27.233%
FY Profit before Tax 1.671095b versus 1.649591b
FY Profit after Tax 1.408032b versus 1.388201b +1.4285%
FY EPS 0.67 versus 0.64 +4.6875%
Final Dividend 10cents a share
Proposing an Increase in company's share capital from 3b to 6b
Bonus share of 1 for every 5 held

Company Commentary
Claims incurred grew by 30% to 6b This was mainly due to bad claims experience of our medical, motor private and Employee Group Life Products

Via the Investor Briefing

CIC plans to make a bonus issue of 1 new share for every 5 paid up shares. CICInvestorBriefing
In Micro Insurance, CIC wrote over Kshs 600 Million of premiums in 2013. We have set a target of 1 Billion in 2014. Our key focus areas will be Micro Health, Life and Micro-Pensions. CICInvestorBriefing
In Real Estate CIC Insurance Group owns 512 Acres in Isinya and 200 Acres in Kiambu . We plan to commence development of the same. CICInvestorBriefing
CIC has identified alternative distribution channels. We have partnered with Tuskys to offer Shopassurance . This will be accessible countrywide on the 40 Tuskys outlets. CICInvestorBriefing
We have partnered with 17 Banks to offer Bancassurance. The premium in 2013 was beyond Kshs 1.7 Billion. CICInvestorBriefing
CIC is expanding regionally. We are already operational in South Sudan. We are also completing the agreements in Uganda and Malawi. We plan to commence operation by July 2014. CICInvestorBriefing

Conclusions

I think they have spent a few basis points on chasing Growth.
There is some headroom from these levels of 6.60.
Investors at the NSE prefer lower denominated shares.
They are clearly expanding their Geographical Footprint.

6 Months through 31st June 2013
Gross Written premiums 4.706147b versus 4.030962b +16.7499%
Net earned Premiums 4.488731b versus 3.412868b +31.523%
Total Income 5.021970b versus 3.884246b
Net Claims and Policyholders benefits 2.994320b versus 2.124464b +40.944%
Total Expenditure 4.532183b versus 3.414207b
H1 PBT 489.817m versus 470.039m +4.2077%
H1 PAT 432.369m versus 415.096m +4.1612%
Total comprehensive income 436.863b versus 413.766
H1 EPS 0.20 versus 0.19 +5.263%

Company Commentary

Gross written premium increase of +16.7499% mainly due to acquisition of new business
Claims incurred grew by 41%. The Overall Loss Ratio is however within the Industry Average.
Board expects positive results in the second half.

Conclusions

Its a cheap share and on a single digit PE. The +40.944% in claims is noteworthy.

FY 2012 versus FY 2011
Gross Written Premiums 9.009893b versus 6.735721b
Gross Earned Premiums 8.168717b versus 6.116421b
Net Earned Premiums 7.288180b versus 5.344296b
Investment Income 790.514m versus 537.928m
Commissions Earned 201.282m versus 150.681m
Other Income 622.017m versus [12.865m]
Total Income 8.901993b versus 6.020040b
Operating and Other Expenses 1.956564b versus 1.505793b
Total OUTGO 7.242665b versus 5.213010b
FY PBT 1.649591b versus 0.787214b +109.54%
FY PAT 1.388201b versus 0.584214b
FY EPS 0.64 versus 0.40 +60%
FY Dividend 10 cents a share

Conclusions

Strong Earnings. Expanding regionally into Sudan and Uganda.

Kenyas CIC Insurance plans to expand its business to South Sudan and Uganda this year Reuters
http://www.reuters.com/article/2013/03/27/cicinsurance-earnings-idUSL5N0CJ2JQ20130327

Kenyas CIC Insurance plans to expand its business to South Sudan and Uganda this year after profits more than doubled last year due to a jump in underwriting and investment income, the firm said on Wednesday.

The insurer, in which Co operative Bank is the single largest shareholder, said it planned to create a subsidiary in South Sudan [will hold 69% whilst COOP Bank South Sudan will hold 31%] and acquire a 40 percent stake in Uganda Cooperative Savings and Credit Union.

Insurance is viewed as a growth sector in the east Africa, because of low penetration rates, with less than 5 percent of the population having any form of insurance cover.

CIC said regional expansion was one avenue for growth. Others the company said it was pursuing included micro insurance, new channels of distribution and diversification of investment strategies.

H1 2012 Earnings versus H1 2011
Gross Written Premiums 4.030962b versus 3.182367b +27%
Total Income 3.884246b versus 2.861849b
Net Claims 2.124464b versus 1.317244b +61%
Total OutGo 3.302207b versus 2.293100b
H1 Profit Before Tax 470.039m versus 568.749m -17%
H1 Profit After Tax 415.096m versus 469.319m
Earnings per Share 0.19 versus 0.29 -34.48%

Conclusions

Company citing one-off costs related to its bourse listing.
Net Claims of +61% is a worrying Line Item.
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 17 Aug 2017
 
Downloads
 
  28-JUL-2017 ::  HALF YEAR RESULTS
  Unaudited Results for the Group for the Period Ended
30 June 2017.

Download N.S.E Announcement
   
  20-JUN-2017 ::  AGM Resolutions
  Annual General Meeting Resolutions.

Download N.S.E Announcement
   
  13-MAR-2017 ::  Full Year Results
  Audited Group Results for the Year Ended 31st December 2016.

Download N.S.E Announcement
   
  27-JAN-2017 ::  Profit Warning Announcement
  Profit Warning Announcement

Download N.S.E Announcement
   
 
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