CIC chief executive wins two-year contract extension

CIC Insurance Group CEO, Nelson Kuria. The insurance company has extended contract of its chief executive officer by two years. Photo/FILE   NATION MEDIA GROUP

By Mugambi Mutegi

In Summary

• Nelson Kuria, who was due to retire on 31st May 2014, will now remain at the helm of the insurance firm until a similar date in 2016
• He currently owns 0.53 per cent of CIC and saw the insurance firm through its listing at the Nairobi bourse in July 2012

CIC Insurance Group has extended the contract of its chief executive officer by two years as it establishes a succession policy in time for his retirement in 2016.

The firm on Thursday said it had retained Nelson Kuria to shepherd the insurer’s entry into foreign markets, guide its investments in real estate as well as help the company to raise new funds for its expansion plans.

Mr Kuria, 57, joined the firm in 1998 as head of business development before being appointed CEO of Kenya’s second largest insurance firm where he owns 0.53 per cent stake.

The insurance company becomes the third firm listed at the Nairobi Securities Exchange (NSE) after Safaricom and Kenya Airways to extend the tenure of its CEO, with the extensions allowing the firms time to identify people to take over their positions.

Safaricom in July extended the contract of its chief executive officer Bob Collymore by two years while Kenya Airways added Titus Naikuni another year to his contract that ends this week.

This has ignited debate on succession planning, which analysts at Deloitte reckon is yet to take deep roots in corporate Kenya, given the small number of executives who have been promoted as CEOs within their firms.

“The board has developed and is implementing a succession policy which will also address the replacement of the GCEO so that there is a smooth handover after the expiry of his contract term,” Japheth Magomere, the chairman of CIC Insurance, said in a statement on Thursday.

“The board has resolved to extend the service contract of the Group CEO, Mr Nelson Kuria, which is due to expire May 31, 2014 (upon retirement) and he has agreed to a two year extension.”

He added that Mr Kuria has built contacts that will be critical for the insurer’s fundraising plans and for its quest to get a larger share of the region’s property market.

CIC Insurance said in June that it was in talks with financiers for Sh1.2 billion capital to fund expansion into South Sudan and Uganda. It has ambitions to set up shop in Tanzania and Malawi so as to cut reliance on the Kenyan market.

It made a net profit of Sh1.3 billion in the year ended December compared to Sh584 million the year earlier.

It is also keen on the property market and recently bought land worth more than Sh1 billion for a multi-billion-shilling property development targeting the middle class.