Regional insurer Jubilee Holdings Ltd (JHL) and Germany's insurance and asset management firm Allianz have put entry into the Ethiopian market on the radar after the conclusion of their multimillion dollar share sale deal relating to general insurance business.
Allianz, which serves more than 100 million retail and corporate customers in more than 70 countries worldwide on Tuesday completed the acquisition of 66 percent stake (1,522,622 ordinary shares) in Jubilee General Insurance Company (Kenya), leaving the holding company (JHL) with 34 percent of the shares.
Following the acquisition, Jubilee General Insurance Limited (Kenya) is now a company of the Allianz Group and upon completion of corporate filings will be renamed "Jubilee Allianz General Insurance Limited".
The two firms (JHL and Allianz) said Tuesday the partnership gives them the synergies to jointly explore new markets, with discussions ongoing for the Ethiopian market.
"I don't think we have a particular limit but we have been actively in discussion with Ethiopia. But obviously it is subject to the government and the choices that Ethiopia makes," Coenraad Vrolijk, Allianz Africa's regional Chief Executive, told a virtual investor briefing on Tuesday.
"I think over the past several years we have both (Allianz and JHL) been active at entering Ethiopia and I think it is a really interesting one to do it together. As the partnership evolves we will be exploring things together."
According to JHL chairman Nizar Juma, the partnership also creates capacity for the two firms to introduce new and quality insurance products targeting low income people to boost insurance penetration in the region that is estimated at 2.6 per cent in Kenya and less than one (1) percent in Uganda and Tanzania.
"We together have the possibility of expanding into other new markets. Jubilee had already declared interest in going to Ethiopia and I think it makes sense for us to go together with Allianz," said Mr Juma.
The acquisition is in implementation of an agreement signed on September 29 last year, where Allianz agreed to acquire majority shareholding in JHL's general insurance business (also known as the property & casualty insurance segment) in Kenya, Tanzania and Uganda as well as the short-term insurance segment in Burundi and Mauritius.
The total transactions are priced at Ksh10.8 billion ($100.93 million).
Allianz's acquisitions of Jubilee General Insurance businesses in Tanzania, Uganda, Burundi and Mauritius is yet to be completed.
The Kenyan transaction is Allianz's second direct investment in the country, after establishing Allianz Insurance Company of Kenya Limited as a Greenfield operation in 2014.
The two firms -- Allianz Insurance Company of Kenya Limited and Jubilee Allianz Insurance Limited-- will continue to operate separately until their operations are consolidated into Jubilee Allianz General Insurance Limited, which is still subject to regulatory approval.
JHL, which is listed on the Nairobi Securities Exchange (NSE), has operations in Kenya, Uganda, Tanzania, Burundi and Mauritius.
Allianz, which is headquartered Germany, is currently present in 12 countries in Africa and serves customers in 49 African markets.
It is argued that through its new partnership with JHL, the German insurer, will be able to expand and broaden insurance markets across East Africa, leveraging on Jubilee Insurance's deep regional knowledge, extensive networks and brand reputation.
The partnership intends to further reinforce JHL's regional leadership position by bringing international best practices to its customers in East Africa, addressing evolving insurance risks with relevant products, and will support Allianz ambitions to reshape its footprint and gain market leadership in key markets on the African continent.