German insurer Allianz and East African insurance group Jubilee Holdings have signed an agreement to form a strategic partnership in the five African countries where the latter currently operates.
The partnership includes Jubilee’s property and casualty insurance segment in Kenya, Tanzania and Uganda as well as the short-term insurance segment in Burundi and Mauritius.
Under the agreement, Allainz will buy controlling stakes in each of these businesses for total consideration of KES10.8 bn ($100m).
Jubilee will retain a significant minority stake in these businesses. It will also retain ownership of its Life and Pensions operations and its Medical insurance business in Kenya, Uganda and Tanzania.
Additionally, Jubilee General Insurance, the Kenyan subsidiary of Jubilee, is the future joint venture company which will also acquire the business of Allianz Insurance Company of Kenya.
The move will make Allianz a co-shareholder alongside Jubilee in five general insurance subsidiaries of the Jubilee Holdings Group. The company is expected to acquire between 51% and 66% holding in each business.
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Jubilee Holdings chairman Nizar Juma 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.”
Jubilee Insurance and Allianz plan to expand across East African insurance markets through the partnership
This strategic partnership is also expected to foster Allianz’s synergies with its current investments including Africa Re, BIMA and Safeboda.
Allianz Africa regional CEO and regional executive board member Coenraad Vrolijk said: “We believe this partnership will foster growth in these markets by delivering innovative solutions and superior quality service made possible by the combined expertise of both organizations.”
The transaction is subject to regulatory approvals in the five markets and restructuring of Jubilee subsidiaries in Uganda and Tanzania into separate general insurance units.