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Nelson C. Kuria- Kenya’s Insurance Oracle Has Come Along Way And Is Back Home

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Chairman of the BOD CIC Insurance Dr. Nelson Kuria
Chairman of the BOD CIC Insurance Dr. Nelson Kuria

 In mid-1993 Eliud Adiedo, together with five other greenhorns got employed at the flourishing state-owned Kenya National Assurance Company(KNAC ), in what would be their first job since completing their undergraduate studies.

And the Marketing Department arguably proved to be a natural port of call for Adiedo having studied for a Bachelor of Commerce degree in India.   

 Will His Return Be A Hand of Providence for The CIC Insurance Group?

That year would also mark the first time this present-day CEO of the 53-year-old Association of Insurance Brokers of Kenya (AIBK)  would formally meet  Mr. Nelson Kuria, then Chief Manager at the underwriter in charge of the General Insurance Division. 

“He was very amicable and endearing, avoiding squabbles at any cost, even when clearly the marketing department was acting contemptuously towards his division. Overall, he appeared to fully understand the nuances of the industry. But what stands out for Dr.Kuria is that if you pass through his hands it will not be lost that he intentionally seeks to thoroughly mold a professional imbibed with good character traits, ” says Adiedo.

On April 22, 2016, something untoward happened

 Mr.Simon Vincent Njoroge Ngwiri, a- once -upon -a- time CEO of East Africa’s largest insurer at the time, namely  KNAC, succumbed to a stroke and died.

Many people, according to the local Daily Nation of April 28 valued him “for his impeccable integrity and unwavering desire to develop people professionally. ”

And  Kuria was  one of them

Wrote the Daily Nation: Having been an assistant manager during Ngwiri’s reign,  Kuria learned firsthand how the great (“quiet but assertive”) man ran KNAC and drove it to unprecedented heights of prosperity.

“He is a hero,” Mr. Kuria declared. “For those who care about integrity, Ngwiri was a role model but because our values as a society do not attach a premium to integrity, he was ignored.”

 This voraciousness defines the vintage Kuria – integrity is inextricably part of his DNA.

Press forward and today -Kuria’s name has added the honorific title of Dr. besides morphing into a kahuna on the global insurance ecosystem including being the Board Chairman of the CIC Insurance Group.

He is also a recipient of two presidential awards:  namely the Order of the Grand Warrior in 2005 and the Moran of the Burning Spear in 2011, two national accolades handed over to him for his immense contribution to Kenya’s cooperative movement.

His LinkedIn profile indicates,  presently he sits as Chairman of seven generic Boards including being the CEO of one company.

And while Dr. Kuria is widely celebrated today as an accomplished corporate captain, his success belies his destitute genealogy while growing up, 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 stones kitchen, “says this recipient of an Honorary Doctorate in Leadership award 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 read about it in books and I’ve not internalized it by reading World Bank statistics, for I have lived in a state of penury. That is why I’m today a strong advocate of equity and social justice,” says Dr. Kuria.

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

 He initially gained entry into the insurance industry in 1982 when he joined  KNAC, working there for 12 years before exiting in 1996 after becoming Chief Manager of the insurance division to try his hand at running a personal consultancy.

His first job upon graduating from the UON in  1979 was working as a project economist  at the  Industrial and Commercial Development Corporation(ICDC)

But two years later Dr. Kuria was headhunted and as fate would have it, he took a big gamble and joined the Co-operative Insurance Company of Kenya (CIS), a company that was financially distressed, ranking 32 in terms of premium business out of 37 registered local underwriters.

The person headhunting Kuria meanwhile had two job offers. The first one was with a small investment bank that offered better pay compared to the second option, which was the insurer. 

But Kuria was advised to take the insurance job despite the pay being less. 

But why?

 Because the role he was being offered – chief manager in charge of strategy and business development -was more challenging compared to what he was expected to do at the investment bank.

It turns out that by 1994 the Insurance company was technically insolvent, needing a Ksh 100 million (present-day US$ 827,011.60) capital injection for it to survive.

 In addition, the Authorities were declining to issue the Insurer with an operating license including threatening to deregister CIS.

The first decade of CIS’s existence was sheer bliss, according to a research titled: Rediscovering Success: A Case Study of CIC Insurance Group, as the underwriter faced no major competitor for business flowing from the cooperative insurance sector. 

And as a result CIS somewhat became complacent

However, in the latter part of the1980s and early 1990s liberalization of the sector happened and CIS’s monopoly of the cooperative sector was jolted. This was courtesy of the World Bank which had imposed Structural Adjustment Programs as a minimum condition allowing the unlocking of badly needed funds.

As a negative spin-off, CIS’s former advantage overnight became its liability, understandably because its leadership had failed to explore fresh markets including shirking from securing the established business emanating from the cooperative movement. 

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

In addition, there was undue interference in the running of the firm which made it much harder to implement policies that could assist the underwriter from its financial difficulties. 

Reads part of the research, “ Furthermore, CIC lacked autonomy from the Government. This is in spite of the fact the Government had no shares in CIS, yet it exercised a lot of influence through its appointee, the Commissioner of Cooperatives. The board, for example, fired the CEO due to his lackluster performance only for him to be reinstated by the government,” reads part of the research.  

Veritably by joining  CIS it arguably seemed  Kuria’s work had singularly been cut out for him 

 “ 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, a move by the CIS leadership to have someone understudy the then CEO, Mr. Silas Kobia, and succeeded him at the expiry of his term, tapped vast experience and skill, hitherto lacking in the organization that injected fresh passion and energy in the management,” reads part of the Case Study. 

He was to assist transform a company that had graciously received a cash injection of Ksh 90 million (presently US$ 744,310.44) from the International Cooperative and Mutual Insurance Federation (ICMIF), a 100-year-old international organization which had also seconded two Canadian consultants to assist ameliorate the underbelly of the underwriter – but it turned out the twin fold effort floundered.

For three years after receiving the Ksh 90 million cash injection, ICMIF wanted out, for it seemed the CIS brand was simply a hopeless case and had surreptitiously relinquished the business to another company-all that was remaining for the deal to mature for the workforce at CIC to sign off.

“ 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 own dignity even though we were not shareholders. That is when I learned the essence of moral courage. The rest is history,” says Dr. Kuria who at the time had been with the company for three months, a period that allowed him to carry out a swot analysis of the company. 

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 organization and created a unified purpose that galvanized all the stakeholders in fighting for its survival,” reads part of the case study. 

That same year – 1999  – the company rebranded from CIS to Cooperative Insurance Company (CIC) Ltd.

Two years lapsed and  Dr. Kuria ascended to the corner office and eventually made it to group CEO in 2011.

And after 14 years of holding the reins at CIC insurance, a period widely considered to have been the golden years for this rekindling insurer, Kuria retired. 

 “ 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 actually looking after a Group with six subsidiaries. And 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.

 A month later after retiring two inquisitive local business journalists sought to know what Dr. Kuria planned to do during 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 sabbatical leave for two months to have a proper rest. Afterward, 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.” 

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 he also appreciates an Opus Dei leaning  Prof.Terry Ryan who happened to be his economist lecturer during his undergraduate days for his mentorship.

In the business, circle turbulence is a normal occurrence and CIC insurance is not immune to the vagaries that buffet corporate bodies.

This was proven true in the fiscal year ending Dec 2020 when this Nairobi Securities Exchange (NSE) listed company posted a Ksh 296.8 million (US$ 2,454,570.43).

With the conspicuously dampening financial results 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.

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 percent 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 percent to KSh2.8 billion (US$25.85m) while finance costs declined 10.1 percent to KSh302 million (US$2.79m),” reported CEO Business Africa.

Tellingly the insurer was hemorrhaging cash and was in need of a fixer

And normally when a company careens about a corporate debacle, business prudence dictates the hiring of an independent Director as a probable panacea.

For the Board of CIC insurance, Dr. Kuria seemed a perfect fit and on September 29, 2020, it appointed him as an independent director, a clear acknowledgment of the white knight credentials of this talismanic corporate insider who currently owns  0.6 % of CIC insurance.

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 a loss-making organization.

Veritably, 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.  

Leading the Group CEO Patrick Nyaga who owns 0.5 % of 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 justified with generic local insurance practitioners, praising the move following the retirement of James Magomere who had served as Chairperson for 16 years.

According to Mr. Clifford Ochieng, Chairman  Association Of Kenya Professional Insurance Agents (AKPIA)  ​​Dr.Kuria possesses the inner knowledge of what makes CIC tick including the inherent professional pedigree and character traits necessary to steer the underwriter to its next chapter of success.

Says Ochieng,“ Dr. Kuria was responsible for the turnaround at CIC insurance before it became a group. His Integrity, valuable Connections, and wide network within and around the global cooperative movement played a bigger role. 

“Having served on different Boards of organizations and also as an economic advisor to President Uhuru Kenyatta. That also played a bigger role as he brings the experience, connections, and networks to the CIC Group brand.”

 

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