CIC Profit Slumps 82% Despite Revenue Growth

CIC Insurance Group has reported a sharp 82 percent decline in profit for the year ended December 2025, highlighting growing pressure on its core underwriting business despite continued revenue growth and balance sheet expansion.

The insurer posted a net profit of KSh 513.8 million, down from KSh 2.86 billion in 2024, marking one of the steepest earnings declines in recent years.

The drop came as underwriting performance deteriorated significantly, with the insurance service result shifting from a profit of KSh 344 million in 2024 to a loss of KSh 176 million in 2025. This reflects rising claims and operating costs that outpaced growth in premium revenue.

Insurance service expenses rose by 16.4 per cent to KSh 28.21 billion, while insurance revenue grew at a slower pace of 11.8 per cent to KSh 29.46 billion, eroding margins and exposing weaknesses in the company’s core business model.

The earnings decline was further compounded by a sharp fall in investment returns, which have historically supported profitability. Net investment income dropped by 58.2 percent to KSh 1.60 billion, compared to the previous year when strong foreign exchange gains and a one off property revaluation boosted results.

Operating profit fell by 61.6 percent to KSh 1.75 billion, while profit before tax declined by 68.7 percent to KSh 1.25 billion, underscoring the broad based nature of the earnings contraction.

Despite the decline in profitability, CIC’s top line performance remained relatively strong, supported by continued growth in premiums and diversification efforts.

Asset management emerged as a key bright spot, with revenue from the segment rising by 40.7 percent to KSh 1.78 billion, signalling increasing traction outside traditional underwriting.

The group’s balance sheet also expanded during the period, with total assets rising by 19.1 percent to KSh 73.75 billion, driven largely by growth in financial investment assets.

However, equity growth was more modest, increasing to KSh 11.85 billion, reflecting the impact of lower earnings on capital accumulation.

Over the longer term, the divergence between asset growth and equity expansion has become more pronounced, with assets more than tripling over the past decade while equity has grown at a significantly slower pace.

This gap is largely funded by liabilities, including insurance contract obligations, which now stand at over KSh 52 billion.

The results also reflect exposure to episodic risks within the underwriting book, including political violence related claims that added pressure to costs during the year.

In response to capital concerns, the group recently completed the sale of land assets in Kiambu and Kajiado, raising KSh 1.8 billion. The proceeds are expected to support capital optimisation efforts, with gains from the disposals set to be reflected in the 2026 financial year.

Despite the earnings decline, the board maintained its dividend at KSh 0.13 per share, implying a significantly higher payout ratio relative to reduced profits.

The company’s earnings trajectory over recent years highlights both recovery and volatility. After posting losses during the pandemic period, CIC rebounded strongly to peak profitability in 2024, before the sharp reversal seen in 2025.

As the group enters 2026, the key challenge will be restoring underwriting profitability while stabilising investment returns.

Analysts say improving cost control and pricing discipline in the insurance business will be critical to rebuilding margins and sustaining long term growth.

For investors, the results present a mixed picture of strong asset growth and diversification potential, weighed against declining profitability and structural pressure in the core underwriting segment.

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