Africa-Press – Kenya. NCBA Group has completed 100 per cent acquisition of AIG Kenya Insurance Company Limited (AIG Kenya), further strengthening its position in the financial services industry.
NCBA has held a minority shareholding in AIG Kenya for over 18 years, and this strategic move brings into NCBA an over 50-year-old insurance business, with a heralded market reputation for offering a sophisticated general insurance proposition to corporates, SMEs, and individuals.
This move comes after approval by NCBA’s cooperate board in early September 2023, to buy the remaining 66.7 per cent of the total shares in a bid to gain full control of the insurer.
The plan involves pumping an additional Sh2 billion into the local subsidiary of AIG.
NCBA , before the full acquisition, held 33.3 per cent of AIG Kenya’s total shares.
Consequently, execution of the transaction was subject to necessary due diligence approvals from the Boards of NCBA, AIG Kenya, AIG Group and the requisite banking, insurance and other regulatory authorities.
NCBA’s Group managing director, John Gachora, expressed confidence in the acquisition seeing it as a catalyst for revenue growth.
“We are excited to welcome AIG Kenya to the NCBA family, and this acquisition will enable our customers to conveniently access all their financial products under one roof,” said Gachora.
He said AIG Kenya’s insurance capabilities will unlock opportunities to catalyse deeper insurance market penetration in Kenya and the East Africa region.
Notably, AIG Kenya CEO Stella Njunge highlighted the need for more collaboration between banks and the insurance sector.
“The acquisition marks a significant milestone in our company’s evolution. NCBA’s resources, expertise, and expansive network will enhance our capabilities, allowing us to offer a broader range of products and services,” said Njunge.
AIG Kenya joins six other NCBA Group subsidiaries – NCBA Investment Bank, NCBA Leasing LLP, NCBA Bancassurance Intermediary Ltd, NCBA Bank Uganda, NCBA Bank Tanzania and NCBA Bank Rwanda.
The insurance industry, with a Compound Annual Growth Rate of 10 per cent, has a low penetration rate in Kenya, currently at 2.43 per cent.
Banks in the country have been keen to tap the insurance market, with almost every lender currently having a bancassurance offering, with major lenders going for stand-alone underwriting businesses through subsidiaries.
Apart from NCBA, Equity has also gone big into the insurance sector having received approvals from the regulator-Insurance Regulatory Authority (IRA) to set up a general insurance company in May 2023.
The move into general insurance by banks is likely shake-up the market that currently has about 56 major players.
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