Allianz, Sanlam Merger To Create Ksh.37 Billion Kenyan Unit

Outside South Africa, Sanlam has operations in more than 30 African countries.

By Kepha Muiruri For Citizen Digital

The merger between underwriters Allianz and Sanlam is expected to create a larger Ksh.37 billion unit in Kenya.

On Wednesday, the pair disclosed a deal to combine their current and future operations in Africa which would create the largest Pan-African non-banking financial services entity on the continent.

“This combination means that customers across Africa will benefit from the expertise and financial strength of the two respected and well-known brands,” the pair said in a statement.

In Kenya, the merger will bring together the operations of the Allianz (General) Insurance Company, Sanlam Insurance Company and Sanlam Life Assurance.

Jubilee Holdings is further roped in the transaction through its minority stake in Jubilee-Allianz General Insurance Company following the sale of a majority stake in its general insurance business last year.

Jubilee sold a 66 per cent stake in its general unit to the German based general underwriter for an estimated Ksh.11.6 billion ($100 million) in a transaction that closed in March 2021.

According to data from the Insurance Regulatory Authority (IRA) covering the year to December 2020, Jubilee General Insurance, Sanlam Insurance Company, Allianz Insurance and Sanlam Life have a combined Ksh.37.1 billion asset base.

Sanlam Life is the largest of the four units with an asset base estimated at Ksh.26.2 billion.

The long-term business unit had an estimated market share of 5.8 per cent at the end of 2020 with gross direct premiums standing at Ksh.5.9 billion.

On its part, Allianz Insurance Company had a market share of 0.7 per cent with Ksh.929.3 million in gross direct premiums while Jubilee General Insurance had a market share of 2.34 per cent with Ksh.3.1 per cent in direct premiums.

Sanlam’s General Insurance unit meanwhile had a 3.1 per cent share of the general underwriting business in Kenya with gross direct premiums at Ksh.4.1 billion.

The merger of the two underwriters remains the subject of requisite approval including nods from market regulators and competition watchdogs across the region.

The pair will have a network of 29 countries with the new entity estimated to have a group equity value in excess of Ksh.242.6 billion (33 million rand).