CIC Insurance plans to set up an office block in Nairobi with a contract sum worth over Ksh651 million. During last year’s Annual Group Meeting (AGM), the company made plans to increase their share capital to Ksh3 billion by creating 90 million ordinary shares. Over Ksh1 billion has recently been invested in the real estate project to boost the company’s revenue.
Property is considered a low risk investment. A financial institution can claim tax deductions based on the cost of repairs and maintenance on the property.
CIC, the country’s 2nd largest insurance provider in terms of market share, is set to list on the NSE later this week on the 19th of July 2012. The insurer’s investment in real estate may not affect Thursday’s listing. “It won’t affect the listing because they’re not raising money. They’re listing by introduction” said Samora Kariuki, a research analyst at NIC Securities. Listing by introduction involves floating of pre-existing shares without the need to raise funds.
The company recently announced plans to branch out to other parts of the East and Central African regions. Like many other financial institutions, the insurer has opted to invest in South Sudan and Uganda. However, CIC intends to liaise with the countries’ local organisations instead of opening up new subsidiaries.