CIC boss Tom Gitogo buys 4.2m shares

CIC Insurance Group’s #ticker:CIC chief executive Tom Gitogo bought an additional 4.2 million shares currently worth Sh14.2 million in the Nairobi Securities Exchange-listed firm.

The purchase, in the year ended December, raised his stake to 0.36 percent from 0.2 percent the prior year according to disclosures in the insurer’s latest annual report.

The move signals Mr Gitogo’s confidence about the company’s future prospects. Substantial ownership of shares in companies they lead is usually seen as a way of aligning the interests of executives with those of shareholders by participating in the payoffs from strategic and operational decisions.

CIC’s non-executive directors have also bought more shares in the company before but they did not raise their stake last year, with Mr Gitogo being the only insider to make purchases.

He now holds 9.5 million shares currently worth Sh32.3 million, up from 5.3 million shares he held in 2017.

The share purchase came as CIC’s share price was on a steady fall from a peak of Sh5.85 in January last year. The stock closed at Sh3.4 Tuesday.

The insurer reported a 30.6 percent net profit jump in the year ended December to Sh625.3 million, helped by higher premiums and interest income.

CIC’s net premiums rose 17.9 per cent to Sh14.2 billion while interest revenue, which was absent in the previous year’s profit and loss account, came in at Sh1.2 billion.

The company also benefitted from a 7.4 percent reduction in operating expenses to Sh3.9 billion.

The cost-cutting measures, higher premiums and interest more than compensated for a reduction in investment income and a surge in claims.