The Independent Uganda: You get the Truth we Pay the Price
Currently, the regional insurers commands the largest market share in Uganda’s general insurance business
Kampala, Uganda | ISAAC KHISA | Regional insurer, Jubilee Holdings Ltd, is selling between 51% and 66% stake of its operating subsidiaries engaged in short term general insurance business across the region to the Munich-based Allianz Group for Kshs10.8bn.
Jubilee Holdings Ltd said it is selling its general insurance units in Uganda, Kenya, Tanzania, Burundi and Mauritius but retain full ownership of its life and health insurance businesses except in Burundi and Mauritius.
Nizar Juma, the company’s chairperson said on Sept. 29 that the operating subsidiaries are subject to the transaction accounts for only 12.3% of its consolidated net assets worth Kshs32.3bn as at June.30, 2020.
He said the transaction will also include transfer of general insurance business currently undertaken by Allianz’s subsidiary in Kenya, Allianz Insurance Company of Kenya, to Jubilee General Insurance.
“We are very pleased with this historic development for Jubilee Insurance,” he said. “Over the past decade, we have been approached by a number of international insurers looking to partner with Jubilee to expand into East Africa. With Allianz, we have now identified a partner whose strategic aims are aligned to JHL’s and whose expertise in the general insurance business is able to enhance the range and depth of products and risk management solutions that we can offer to our customers.”
The transaction, however, is subject to approval from shareholders, completion of restructuring of JHL subsidiaries in Uganda and Tanzania into separate general insurance entities and obtaining regulatory approvals from the Capital Markets Authority, Insurance Regulatory Authorities in each of the five countries and local and regional competition authorities.
For that, the insurer has advised investors to exercise caution when dealing in JHL’s shares on the Uganda Securities Exchange, Nairobi s Securities Exchange and Dar es Salaam Securities Exchange.
Coenraad Vrolijk, Regional CEO and Regional Executive Board Member of Allianz Africa said the insurer believes the partnership will foster growth in their markets by delivering innovative solutions and superior quality service made possible by the combined expertise of both organizations.
Allianz, with its headquarters in Germany, serves more than 100 million retail and corporate customers in more than 70 countries worldwide and has over a century of history in Africa, where it has built a meaningful footprint across the continent.
It is currently present in 12 countries in Africa and serves customers in 49 African markets. Globally, Allianz achieved total revenues of 142 billion euros ($168 billion) and an operating profit of 11.9 billion euros ($14 billion) in 2019.
This development comes three months since JHL purchased an additional 9.44% stake in Bujagali Energy Limited in Uganda from technical partners SN Power for KShs4. 2billion ($40 million). This increased Jubilee Holdings’ shareholding in Bujagali Energy Limited (BEL) from 8.8% to 18.24%.
Currently Jubilee General Insurance controls a lion’s market share in Uganda‘s insurance market with 25.7%, followed up with UAP and Sanlam insurance companies with 19.6% and 12.5% respectively in a country that boasts of 22 general insurance companies.
GoldStar and ICEA general insurance have 4.3% and 3.8% market share respectively. The insurer recorded a 9.8% growth in gross underwritten premiums from Shs 133.4bn in 2017 to Shs 146.6bn in 2018.
Over the past five years, high profile insurance firms have picked interest to acquire established insurance firms with regional presence in East African.
UK-based prudential and private firm leapfrog recently acquired a 24.1% stake in the ICEA Lion insurance holding for Kshs2.4bn.
Similarly, Switzerland based Swiss Re also holds a 15.8% stake in Britam Holdings Ltd – which has operations in Uganda, Kenya, Tanzania, Rwanda, South Sudan, Mozambique and Malawi.
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