Overview:
The money was acquired as a loan from its Kenyan subsidiary amid concerns that the Ugandan branch is not realising its full potential due to limited investment.
CIC Insurance Uganda is set to inject a total of Shs3.2 billion to support its capital adequacy as required by the law.
The money was acquired as a loan from its Kenyan subsidiary amid concerns that the Ugandan branch is not realising its full potential due to limited investment.
CIC Africa Uganda deputy finance manager Nathan Ainembabazi says the firm’s capital adequacy has remained low despite significant investment.
It is also a requirement for insurance firms operating in Uganda to have at least Shs4.5b capital. This is contained in the Insurance (Capital Adequacy and Prudential Requirements) Regulations, 2020.
The money is intended to enable the firms build their capacity in handling risks.
Nevertheless, Ainembabazi said that they met the new capital requirement of Shs4.5b for its life insurance unit last year.
In 2023, CIC Group Kenya converted a loan of Shs13.5b ($3.6m) to its subsidiary in Uganda into equity.
The transaction, in essence, saw CIC Group increase the share of its investments in the Ugandan subsidiary from 93 percent to 95 percent.
CIC Insurance Uganda is part of CIC Insurance Group with a regional footprint in South Sudan, Kenya, Uganda and Malawi. CIC Group entered Uganda in 2014 through a partnership with Uganda Co-operative Savings and Credit Union and Uganda Co-operative Alliance.
Financial details indicate CIC Insurance Uganda reported a 31 percent increase in revenue from Shs11.12b in 2022 to Shshs14.54b in 2023, investment return rose from Shs1.2b to Shs1.6b.
Data also indicates that the insurer’s assets expanded from Shs17.3b to Shs23.19b due to an increase in deposits with financial institutions, intangible assets, and assets from reinsurance contracts.