German insurer takes 66% of Jubilee Insurance
The acquisition follows an agreement with Jubilee Holdings Limited to cede 66% of the company’s short-term general (prop ...
German insurer, Allianz has acquired a majority stake in Uganda’s Jubilee insurance, making it the largest insurance group in the East African region.
The acquisition follows an agreement with Jubilee Holdings Limited to cede 66% of the company’s short-term general (property and casualty) activities to the German insurer, in five east African countries including Uganda, Kenya, Tanzania, Burundi and Mauritius.
According to the Jubilee insurance regional chief executive officer, Julius Kipmg’tich, all approvals from the Insurance Regulatory Authority have been granted, and the merged entity will now go by Jubilee -Allianz General Insurance.
He said the new marriage, forged in September last year, will see an increase in the uptake of risks, because of a bigger balance sheet, provided by the majority shareholder, Allianz.
He further said service delivery, innovation and competition in the sector is likely to go a notch higher given the arrival of a rich, experienced global player on the local market.
According to Kipmg’tich, Uganda boasts of a number of opportunities in minerals, oil and gas, agriculture and other natural resources, in addition to peace and stability, with a fast-growing economy hence the need for partnerships to cover arising risks.
“The potential of this economy is huge, and the risks, therefore, are high, needing coverage. That is why we have partnered with a larger entity to be able to provide a better service,” he said, during the launch of the partnership on Tuesday.
The Allianz Africa Regional Chief Executive Officer, Coenraad Vrolijk said the new team will focus on creating new products to enhance uptake of insurance in the country, beyond the registered 1%.
He said presently, there is need for creation of low-cost insurance products to trap Micro, Small and Medium Enterprises (SMEs) which form the bulk of Ugandan business.
German ambassador, Matthias Schauer hailed the acquisition that he said will further increase the influence of German companies and investments in the country.
He said the approximately €100m (sh413b) investment is by far the largest by a German company in East Africa, over the last century.
He said this investment is testimony of the good business environment in East Africa, and Uganda’s vibrant economy with a growing middle class.
“As the economy grows, more risks arise demanding uptake of insurance, and I am glad to witness a German company stepping in the country to do just that,” he said.
Delphine Traoré, the Allianz Africa Regional Chief Operations Officer said the global insurer was attracted to Uganda by the high standards of regulation in the sector.
“We were also wooed by the booming agriculture sector, the oil sector and many infrastructure projects going on in Uganda whose risks need to be covered,” she said.
She also sited Uganda’s low penetration which she said is a big attraction to investors, because it points to a good ground to invest.
She said the company will also focus on agricultural insurance, seeing that Uganda is one of the countries with a large portion of arable land, where the need for micro insurance remains a key area of growth.
The Insurance regulator’s chief executive officer, Alhajj Ibrahim Kadunabbi Lubega said the merger shows confidence in Uganda’s insurance sector, and the bright future it holds.
He said the sector has continued to grow, despite the Covid-19 related disruptions to the economy, having recorded 19% growth in 2020.
“I am also glad that our high regulatory standards are paying off with the arrival of such big players. Growth in this market is unstoppable,” he said.