Dr. Nelson C. Kuria Return to CIC Insurance Group

: Dr. Nelson C. Kuria Returns to CIC Insurance Group: Kenya’s Insurance Oracle Brings Promise of Providence | With 0.6% Stake, Former Chief Manager at Kenya National Assurance, and Industry Veteran Since 1979, Kuria’s Leadership Transformation Journey Began at ICDC

                 By Charles Wachira

When Dr.Nelson C. Kuria returned to the Board of CIC Insurance  Group as an independent Director, the 54-year-old -company was acknowledging the white knight credentials of a talismanic corporate insider.

Normally when a company careens towards a corporate debacle, business prudence dictates the hiring of an independent Director as a panacea.

That’s why this Nairobi Securities Exchange (NSE) listed company was in dire need of a fixer; having posted a Ksh 296.8 million (US$ 2,454,570.43) loss in the year ended December 2020. 

Conspicuously, the dampening financial results ended up upending a 13-year profit-making run by the insurer since 2007.

It also marked the first full-year loss to be reported by the company since listing on the NSE on July 18 2012 becoming the sixth insurance company to be listed on the bourse and overall, the 60th company to list.

It turns out, that the downcast news coming from CIC insurance emanated from the investment income of this underwriter which had slumped by 25.9 % to KSh1.2 billion (US$11.08m) in a period when the Covid-19 pandemic had depressed share prices on the Nairobi Securities Exchange.

“ The insurers’ bottom line was also hurt by a 7.6 per cent rise in claims to KSh5.4 billion (US$49.85m). Its net premiums were flat at KSh7.1 billion (US$ 65.55m). CIC’s operating expenses dropped 10.7 per cent to KSh2.8 billion (US$25.85m) while finance costs declined 10.1 per cent to KSh302 million (US$2.79m),” reported CEO Business Africa.

According to the Nairobi-based Business Daily, Dr Kuria’s appointment was part of ongoing management and boardroom changes geared at turning around the fortunes of this loss-making organization.

Dr. Kuria, presently a recipient of two presidential awards namely the Order of the Grand Warrior in 2005 and the Moran of the Burning Spear handed to him in 2011, for his contribution to Kenya’s cooperative movement had worked as CEO for 14  years before retiring.

 The company had earlier extended his contract by two years.

 A month later after retiring two inquisitive local business journalists sought to know what he planned to do in his retirement.

Said Dr. Kuria, “As one leadership guru said, opportunities do not run around waiting to be discovered; they are like buried treasure that only the most discerning and persevering find.

“I will be going on a sabbatical leave for two months to have a proper rest. Afterwards, I will consider offering my knowledge and experience in financial services by sitting on boards, both in the public and private sectors, if invited,” he told the local Standard Newspaper.”

 In addition, he said, “I would also like to put in more time serving God through the church, as well as giving back to society.” 

Veritably today, it would appear the CIC Board was prescient in believing Dr. Kuria’s presence would speed- up the reawakening of the limping Organization.

For six months after the arrival of Dr Kuria, the underwriter reported a Ksh 668.4 million (US$ 5,527,745.53) net profit for the year ending December 2021, the highest net profit in six years, from a recovery of Ksh 296.8 million (US$ 2,454,570.43) loss registered the previous year.

  The Group CEO Patrick Nyaga who has a  0.5 % stake in the company said the improved performance was a result of turnaround strategies started in mid-2020.

Said Nyaga, “The positive results are attributed to the implementation of key transformational initiatives during the year, key among them: performance management, functional structures to support our Corporate Strategic Plan, operational efficiency, cost optimization, digitization, research, and innovation among others.”

To close Nairobi watchers the ensuing naming of Dr. Kuria as Chairman of the CIC Insurance Board was not surprising, for the telltale signs had initially signed off on 29th September 2020 with the Friday, July 02 2021 occurrence seen as a formality.

Presently Chairman of seven generic Boards and CEO of one company according to his LinkedIn profile, the move leading to Dr. Kuria’s elevation was arguably well received by generic local insurance practitioners, following the retirement of James Magomere who had served as Chairperson for 16 years.

And while Dr. Kuria is widely celebrated today as an accomplished corporate captain, his success belies his destitute genealogy, which he says, has been the source of the fire in his belly.

“ I was born and bred up in Nyandarua in a place called Kinagop where I experienced real abject poverty. As a family, we would intermittently sleep on empty stomachs. We then relocated to a place called Ndunduri( Gwa Kiongo) which was more backward. My father used to milk cows, belonging to colonists while my mother owned only one nylon dress which she used to hand-wash on Sundays and dry using the Kikuyu traditional three-stone kitchen used to harvest pyrethrum, “says this recipient of an Honorary Doctorate in Leadership awarded in 2017 by the Swiss Management Academy.

“ So if you are talking about poverty, it’s something that I can relate to because I have not just read about it in books and neither have I just internalised it from reading World Bank statistics, for I have lived in a state of penury in my formative years.That is why I am today a strong advocate of equity and social justice,” says Dr. Kuria.

Initially, this transformational leader who currently owns 0.6 % of CIC  gained entree into the insurance industry in 1979, working as a project economist at the Industrial and Commercial Development Corporation(ICDC)  before moving to the Kenya National Assurance in 1982 where he worked for 12 years, exiting after becoming Chief Manager of the insurance division.

Sadly his father died in 1983, four years after graduating from the University of Nairobi. As a firstborn in a family of seven children, the responsibility of bringing up his siblings fell on his shoulders.

Dr. Kuria says his character of servant leadership was initially honed by the De La Salle Brothers who taught at Nyahururu High School, his alma mater and also by the  Opus Dei leaning Prof.Terry Ryan who happened to be his economist lecturer during his undergraduate studies at the UoN.

Verifiably, the 14 years that Dr.Kuria held the captaincy at CIC Insurance are fondly considered the golden years for this rekindling insurer. 

“ The transformation of CIC Insurance was a phenomenon. We had three local subsidiaries, namely, Life, General and Asset management companies. We also achieved regional footprints in South Sudan, Uganda and Malawi. We were looking after a Group with six subsidiaries. The Group had risen to become the leading cooperative insurer within the Third world. And we were widely seen as a role model of cooperative insurance development in the world,” Dr Kuria briefly summarizes the sort of iron-clad legacy associated with his 14-year tenure.

But if you think that all was hunky-dory for this recipient of two presidential awards — Order of the Grand Warrior in 2005 and Moran of the Burning Spear in 2011, for his contribution to Kenya’s cooperative movement, kindly check out the meaning of starry-eyed, for that essentially describes you.

 The unvarnished truth is that Dr. Kuria took a big gamble in June 1998 when he joined the Co-operative Insurance Company of Kenya, (CIS) as the company was then known for the underwriter, at the time, was financially distressed, ranking 32 in terms of premium business out of 37 registered local insurers.

  According to research titled  Rediscovering Success: A Case Study of CIC Insurance Group: the first decade of CIS’s existence was when the underwriter faced no major competitor in the cooperative insurance sector, guaranteeing a blissful business life.

 As a result of the good run, CIS became complacent, feeling quite certain that there was always going to be business to be done. However, in the latter part of the 1980s and early 1990s liberalization of the sector happened and CIS’s monopolization of the cooperative sector was jolted.

It turns out the World Bank had imposed Structural Adjustment Programs as conditions for any financial assistance and required the government to liberalize the economy.

 Suddenly, CIS’s former advantage became its Archill heels.

For while in the past CIS had been assured of business by the cooperatives, the leadership at the insurer had not seen the need to explore new markets or the need to take care of its perceived captive market.

However, with liberalization, cooperatives suddenly discovered that they did not have to insure with CIS anymore. They also discovered the rates offered by CIS could be matched or bettered by other insurers.

And understandably CIS found itself backpedalling.

 Furthermore, CIC lacked autonomy from the Government. This is despite the fact the Government had no shares in CIS, yet it exercised a lot of influence through its appointing authority, namely the Commissioner of Cooperatives.

The board, for example, fired the CEO due to his lacklustre performance only for him to be reinstated by the government,” says a former manager who spoke on condition of anonymity for they are not allowed to talk on behalf of the insurer.

 All the while, Dr.Kuria had been offered two jobs by the person who had headhunted him. The first one was with a small investment bank that offered better pay compared to the second option, the insurer. 

For some reason, the person who had headhunted him advised him to take the insurance job despite the pay being less. 

But why?

 Simply because the role he was being offered – chief manager in charge of strategy and business development -was more exciting compared to what he was going to do at the investment bank.

 By 1994 the Insurance company was technically insolvent, needing a Ksh 100 million (present-day US$ 827,011.60) capital injection.

In addition, the Authorities had declined to issue an operating license, threatening to deregister CIS.

It now appeared that  Dr. Kuria’s work was well cut out for him.

 He was to assist in transforming a company that in Dec 1995 had received a cash injection of Ksh 90 million (presently US$ 744,310.44) from the International Cooperative and Mutual Insurance Federation (ICMIF).

All the while two Canadians had been hired as consultants from the 100-year-old international organization but had failed to resuscitate the limping insurer.

“ Moreover, the hiring of Mr. Nelson Kuria, an experienced hand with in-depth knowledge of the Kenyan insurance industry, injected a refreshing impetus for the management. The recruitment was a move by the CIS leadership to have someone understudy the then-CEO, Mr.Silas Kobia and succeed him at the expiry of his term. And by the company recruiting Kuria, it had unknowingly tapped into a cauldron of vast experience and skill, hitherto lacking in the organization that injected fresh passion and energy in the management,” read part of the Case Study. 

But three years after receiving the Ksh 90 million cash injection, ICMIF wanted out, for in its eyes, it seemed the CIS brand was a hopeless case and had surreptitiously relinquished the farmed-out the business to another company and was waiting for CIS to sign off on the dotted line.

“ I told the international investors that we were not going to allow the company to be sold off. And it was wrong for them to go behind our backs to negotiate a deal on our behalf. In addition, I told the Executive committee of the Board that we were not going to agree to the deal. We had our dignity even though we were not shareholders. That is when I learnt the essence of moral courage. The rest is history,” says Dr. Kuria who had been at the company at the time, for three months, a period that allowed him to carry out a swot analysis of the organisation. 

“ Capitalizing on his vast experience, knowledge and skills, both at the management and operational level, Mr. Kuria teamed up with the CIS leadership and management to develop a comprehensive five-year strategic plan that was unveiled in 1999. This strategic plan laid the foundation for the radical transformation of the organisation and created a unified purpose that galvanised all the stakeholders in fighting for its survival,” reads part of the case study. 

In 1999 the company rebranded from CIS to Cooperative Insurance Company (CIC) Ltd.with Dr Kuria becoming the CEO before ascending to group CEO in 2011.

 Since 1999, when this company which is owned by about 1,562 local Co-operative Societies and around 3,875 individual Co-operators with the Co-operative Bank of Kenya Limited holding a 26% stake, re-launched, CIC insurance has proved that despite facing market challenges its DNA is accustomed to rising like a phoenix.

“ What you are today does not condition what you will become tomorrow.

For so long as you have a clear vision of putting trust in God, He will raise you from grass to grace,” says Dr.Kuria.

Keywords: Dr. Nelson C. Kuria: CIC Insurance Group: Nairobi Securities Exchange (NSE):Corporate Turnaround:Kenya Insurance Industry