Barclays Africa Group has acquired a majority stake in a general insurance company as it seeks to diversify into the bancassurance business. Barclays Africa yesterday announced that it has reached an agreement to acquire 63.3 per cent of First Assurance in a deal valued at Sh2.8 billion including a Sh722 million capital injection.
“The planned acquisition of First Assurance is a good strategic fit for our business; provides us with a strong platform to expand our bancassurance offering in East Africa, and complements the group’s financial target of increasing our revenues from Africa outside of South Africa to between 20 per cent and 25 per cent,” said Barclays Africa Investment Management and Insurance Managing Executive Lanz Zulu.
First Assurance is among the top 10 largest general insurers in Kenya, offering general cover in Tanzania as well as providing life policies in Kenya.
First Assurance Managing Director Stephen Githiga said the lender would provide a strong brand and increased network distribution.
“Barclays Africa will bring a strong brand as well as technical support for our products and services. Existing First Assurance customers will benefit from access to new products and services as a result of the acquisition,” he said. The insurer reported a profit after tax of Sh518 million and total equity of Sh2.1 billion, excluding the capital injection planned as part of the transaction.
Barclays Life Assurance Kenya (Blak), which was launched in April, will also benefit largely from the over 50,000 existing customer policies by the new acquisition.
It will also give Blak a general insurance presence in Kenya and Tanzania. The transaction now awaits regulatory approvals from authorities in South Africa, Kenya and Tanzania, as the regional lender seeks to follow the rapid revenue diversification plan adopted by banks lately.
