- CIC Insurance Group PLC has announced plans to reduce its workforce by 10% through a Voluntary Early Retirement Programme.
- The move is aimed at driving cost efficiencies, simplifying organizational structures, and addressing complexities related to reporting lines.
- Staff at different levels are eligible to apply, with an attractive benefit package on offer.
CIC Insurance Group PLC has announced plans to release 10 percent of its staff through a Voluntary Early Retirement Programme. Group Chief Executive Officer Patrick Nyaga states that the move aims to drive cost efficiencies, simplify the organizational structure, and eliminate complexities related to reporting lines, among other factors.
Nyaga explains that the Group recently completed a review of its detailed organizational design, resulting in the adoption of a leaner, flatter, and more transparent structure. The new organizational setup seeks to optimize vital capabilities and eliminate functional and resource duplication within the Group.
CIC Insurance staff
Approximately seventy-five staff across the four companies, at various levels out of a total complement of seven hundred and twenty-eight as of October 2023, are expected to be affected, representing 10 per cent of the total staff. Staff at different levels are eligible to apply, with an attractive benefit package on offer.
“The Group anticipates that this rationalization will yield the desired outcomes, leading to a more efficient and profitable Group in the short, medium, and long term, thereby increasing shareholder value and returns. The Group will only consider redundancies if absolutely necessary, and in such cases, they will be conducted in accordance with the applicable labor laws,” he added.
CIC Group’s business remains fundamentally sound, experiencing steady growth in business and profitability, with profit before tax increasing by 153 per cent to $7.8 million as of June 30, 2023. The company recorded a Profit before Tax for the period ended December 31, 2022, of $4.1 million, reflecting impressive growth from a Loss before Tax of $520,000 in 2021.
Gross earned premiums increased by 17 per cent, from $40 million in 2021 to $47 million. Total assets went up by 13 per cent, from $120 million to $137 million, signaling strong investment returns for both policyholders and shareholders.
Claims incurred decreased by 10 per cent from the previous year due to a reduction in group life claims related to the Covid-19 pandemic and prudent claims management.
High inflation drives up costs
The latest private sector survey by the Central Bank of Kenya (CBK) indicates that Kenyan CEOs expect their companies to hire fewer people in the last quarter of 2023, attributed to a tough economic environment that has raised costs and reduced turnover. The CBK Survey, released in August 2023, indicates that 70 per cent of non-bank respondents don’t expect to hire more workers in the second half of the year.
According to the survey, businesses have experienced higher inflation, leading to increased input costs. Additionally, a weaker shilling against the dollar has raised the cost of imported raw materials and products.
“Non-bank respondents were more cautious about creating new jobs due to low business turnover, expected low production volumes, a harsh economic environment, high cost of living, and the need to optimize the existing workforce to contain operational costs. There are also concerns about the high cost of production due to an increase in prices and, in some cases, scarcity of inputs,” said the CBK in the market perceptions survey for July.