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German insurer buys into Jubilee Holdings

The deal is worth Sh10.8 billion

In Summary
  • Allianz to acquire a controlling stake of between 51 and 66 per cent in Jubilee’s General Insurance businesses.
  • The transaction is subject to regulatory approvals in five countries including Kenya
Jubilee Holdings chairman Nizar Juma (L) Allianz Africa CEO Coenraad Vroliik (R)
Image: COURTESY

The African subsidiary of the global insurer and asset manager Allianz plans to buy an eight per cent stake in Kenya’s Jubilee Holding Plc (JHL).

The offer, subject to regulatory approvals, will see the Germany based firm acquire a controlling stake of between 51 and 66 per cent in Jubilee’s General Insurance business Kenya, Tanzania, Uganda, Burundi and Mauritius, forming Jubilee-Allianz General Insurance Limited.

JHL will retain ownership of its Life and Pensions operations and its Medical insurance business in Kenya, Uganda and Tanzania.

 
 

''In the proposed partnership structure, Allianz will acquire controlling stakes in each of these businesses for a total consideration of Sh10.8 billion while JHL will retain a significant minority stake,’’ the cautionary statement from the Nairobi Securities Exchange (NSE) read in apart.

JHL’s subsidiary in Kenya, Jubilee General Insurance Limited is the future joint venture company, which will also acquire the business of Allianz Insurance Company of Kenya Limited.

The deal will require regulatory approvals in the five markets as well as a restructuring of JHL’s subsidiaries in Uganda and Tanzania into separate general insurance units.

On a preliminary Pro-forma basis, these general insurance companies represent 12.3 per cent of JHL’s total consolidated net assets of Sh32.3 billion as of  June 30, 2020.

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.

Founded in Kenya in 1937 by the Aga Khan Development Network (AKDN), JHL is a multinational financial services holding company with operations in Kenya, Uganda, Tanzania, Burundi and Mauritius and is now an affiliate of the Aga Khan Fund for Economic Development (AKFED).

 

JHL, which is listed in East Africa and the general insurance market leader in the Ugandan and Tanzanian markets, has gross written premiums of Sh38.2 billion.

Through this partnership, Jubilee Insurance and Allianz aim to jointly expand and broaden insurance markets across East Africa, leveraging on its deep regional knowledge, extensive networks and brand reputation with the global expertise and capacity of the Allianz Group.

JHL chairman Nizar Juma said 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

''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,’’ Juma said.

On his part, JHL CEO Julius Kipngetich said Allianz has expertise across a wide spectrum of clients and insurance needs.

As our corporate clients expand outside the East African region, they demand an insurer that provides comprehensive and effective expertise and solutions to all their insurance needs, with best practice in underwriting and claims processing,’’ Kipngetich said.

“We are confident that this is going to be the most successful insurance partnerships in Africa,’’ Coenraad Vroliik Regional CEO said.