Kenya’s NCBA Group, the fourth-biggest financial institution by market capitalisation, has acquired insurer AIG Kenya from American Worldwide Group Inc for an undisclosed quantity.
For the previous 18 years, NCBA Group, Kenya’s fourth-biggest financial institution by market capitalisation, has held a minority share within the Kenyan subsidiary of insurer American Worldwide Group (AIG) Inc. Now, the lender has an even bigger share of the pie.
NCBA has acquired the insurer for an undisclosed quantity. The lender finalised a 66.67% buyout deal that may give it full management of AIG Kenya, which controls 2.14% of Kenya’s insurance coverage market, it mentioned in a press release.
The acquisition places the lender on monitor to its bold enlargement drive to develop into a “common financial institution” that gives clients with all their monetary wants, managing director John Gachoras mentioned.
With the buyout, NCBA is eyeing a bigger share of Kenya’s $2.3 billion (KES300 billion) insurance coverage business. The acquisition comes at a time when Kenyan lenders have been shifting into insurance coverage to take up alternatives introduced by low insurance coverage penetration. Fairness Group, the largest financial institution in Kenya, announced in March that it’ll enter the final and medical health insurance market this month, following a profitable launch of life insurance coverage in 2022.
“With insurance coverage more and more turning into a fundamental monetary want for the kind of clients we serve, an ecosystem of NCBA’s bodily and digital distribution platforms and AIG Kenya’s insurance coverage capabilities will unlock alternatives to catalyze deeper insurance coverage market penetration in Kenya and the East Africa area,” mentioned Gachora.
Kenya’s insurance coverage penetration is 3%, the fourth highest in Africa after South Africa (17%), Namibia (7.8%), and Morocco (3.9%). Insurance coverage penetration in Africa’s financial powerhouses like Nigeria and Egypt trails their friends at 0.4% and 0.6%, respectively.