First Assurance MD Stephen Githiga, Barclays Bank Kenya MD Jeremy Awori and Barclays Bank Africa Group Ltd managing executive, Wealth Investment Management announced the proposed deal to acquire a major stake of First Assurance company Limited. Barclays Africa had reached an agreement to buy a 63.3 per cent stake in First Assurance Company Ltd for Kshs. 2.822 billion, which includes a capital injection of Kshs. 722 million. The announcement was done at Villa Rosa Kempinsky on Wednesday, June 10, 2015.
The transaction opens the door for the Barclays Africa’s Kenyan subsidiary to gain a foothold in the insurance market.
Barclays Africa Investment Management and Insurance Managing Executive,Mr. Lanz Zulu, reiterated that the plan is a good strategic fit for business as it provides a strong platform to expand bancassurance’s offering in East Africa, and complements Barclays’ financial target of increasing the group’s revenues from Africa outside of South Africa to between 20 per cent and 25 per cent.
Mr. Stephen Githiga, First Assurance Managing Director, said Barclays would provide a strong brand and increased network distribution as 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.
“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 partnership,” he said.
Barclays Life Assurance Kenya (Blak), which was launched in April, will also benefit largely from the over 50,000 existing customer base.
“The deal will enable us to significantly scale up First Assurance’s life insurance business using the synergies we both enjoy including branch reach and technical expertise,” said Lanz Zulu, Barclays Africa’s Wealth, Investment Management and Insurance managing executive.
“We shopped around but First Assurance’s capitalisation, its strong board and good reputation stood out,” he said. The deal will also give Blak a general insurance presence in Kenya and Tanzania.
The transaction now awaits regulatory approvals from authorities in Kenya, Tanzania and South Africa.