Jubilee Holdings to sell majority stake in general insurance business
Regional based insurer Jubilee Holdings Limited (JHL) has agreed to sell a controlling stake of its general underwriting business to global insurance giant Allianz.
Valued at Ksh.10.8 billion ($100 million), the deal will see Allianz acquire about two thirds of Jubilee’s general insurance business across East Africa and in Burundi and Mauritius.
Meanwhile, Allianz which operates 12 general insurance business companies in the region is expected to merge its local general insurance outfit to that of JHL.
Jubilee is meanwhile expected to to retain the control of its life and health business which make up the Group’s other differentiated businesses following recent guidelines to alter the structure of underwriters in Kenya.
JHL Chairman Nizar Juma says the deal which will see its general insurance business renamed to Jubilee Allianz General Insurance represents the firm the opportunity to expand its footprint on the continent.
“We’ve had so many international companies wanting to merge with us but we feel this was one transaction with an overall benefit to Jubilee Holdings,” he said.
The underwriter is expected to keep its full complement of staff in its general business in what it terms as a smooth transition which will be devoid of redundancies.
Nizar says the sale of the stake does not however represents a pause to the company’s desired acquisitions of smaller underwriters in the country.
“Our desire to acquire other companies will not stop or slowdown. If anything, our acquisition strength will be increasing from this transaction,” he added.
On his part, Allianz Africa Regional CEO Coenraad Vrolijk says the deal will enhance its presence in the region and continent.
“We have been on the continent since 1912 but have only started looking at Africa more seriously in 2015. We’ve been looking at how to become more meaningful,” he said.
Allianz is the world’s largest general insurance underwriter and is headquartered in Germany.
In 2019, the Group has a whopping Ksh.18 trillion in revenues.
General underwriting represents 12.3 per cent of JHL’s total consolidated assets which stood at Ksh.32.3 billion at the end of June.
The deal now awaits requisite approvals from JHL shareholders, the Capital Markets Authority (CMA), the Insurance Regulatory Authority (IRA) and the Competition Authority of Kenya (CAK).
The transaction is not expected to affect the listing of Jubilee Holdings on the Nairobi Securities Exchange (NSE).