Insurance giants, Sanlam and Allianz have agreed to combine their current and future operations across Africa to create the largest Pan-African underwriter on the continent.
Combining Sanlam’s expertise in Africa with Allianz’s global capabilities and products, particularly for multinationals, the partnership aims to increase life and general insurance uptake, accelerate product innovation and drive financial inclusion in high-growth African markets.
“We are delighted to have Allianz as partners and believe their expertise and financial strength will add tremendous value to our businesses,” says Sanlam Group CEO Paul Hanratty.
Currently, Sanlam is the largest non-banking financial services company in Africa while Allianz is one of the world’s leading insurers and asset managers with over 100 years of experience in the African market.
A member of the Allianz board Christopher Townsend said: “Allianz is pleased to accelerate its growth in this important region through a partnership with the undisputed market leader. Sanlam’s capabilities extend our local reach and market penetration, and the joint venture allows us to establish leading positions in key growth markets for Allianz.”
Their tie-up means that customers across Africa will benefit from the expertise and financial strength of the two underwriting giants.
The chairmanship of the joint venture partnership will rotate every two years between Sanlam and Allianz while the new entity’s CEO will be named in due course.
The joint venture will house the business units of both Sanlam and Allianz in the African countries where one or both companies have a presence.
“Namibia will be included at a later stage and South Africa is excluded from the agreement,” a note from both firms indicated.
The combined operations of Sanlam and Allianz will see the new entity operating in 29 countries across the continent.
The joint venture will be the largest Pan-African insurance player and is expected to be ranked in the top three, in the majority of the markets where the entity will operate.
The entity is expected to have a combined total group equity value in excess of 33 billion South African rands (approximately 2 billion euros).
Sanlam and Allianz’s joint venture is billed to create value for all stakeholders through greater economies of scale, broader geographic presence, larger combined market share, and a more diversified product offering.
The deal is, however, subject to certain conditions including but not limited to the receipt of required approvals from competition authorities, financial/insurance regulatory authorities, and any customary conditions that Sanlam and/or Allianz would be required to fulfill for each jurisdiction.
Last year, Allianz acquired a 66 percent stake or 1,522,622 ordinary shares from Jubilee Holdings Limited (JHL), East Africa’s largest insurance group. The acquisition followed the execution of an agreement signed on September 29, 2020, whereby Allianz agreed to acquire the majority shareholding in the short-term general (property and casualty) insurance business operations of JHL in Kenya, Uganda Tanzania, Burundi, and Mauritius.