Sanlam Limited, Africa’s largest insurer agreed to form a joint venture with Germany’s Allianz SE that will combine their assets on a continent valued at 2 billion euros ($2.1bn) and help the partnership expand to 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.
Sanlam and Allianz will fold their respective African operations excluding those operating in South Africa — into a new unit majorly controlled by Cape Town – based group, according to a statement on Wednesday. They agreed to remain invested for at least 10 years. Namibia will be included at a later stage.
The deal will enable Sanlam to enhance its capabilities in existing markets and expand its footprint, the company said, while utilising Allianz’s scale and expertise as one of the world’s largest financial services groups. This will birth for the customers best-in-class, innovative insurance solutions and technical excellence. The statement cleared that “The joint venture will create value for all stakeholders through greater economies of scale, better geographic presence, larger combined market share, and a more diversified product offering; scaling up life and general insurance penetration, accelerate product innovation and drive financial inclusion in high-growth African markets.
Sanlam Group CEO Paul Hanratty speaks, “In line with Sanlam’s stated ambition to be a leading pan-African financial services group, the proposed joint venture will enable us take a significant step towards realising that ambition. It will also strengthen our leadership position in multiple key markets that are core to our African strategy, building quality and scale where it matters. We are delighted to have Allianz as partners and believe their expertise and financial strength will add tremendous value to our businesses.”
In accordance with our enterprise strategy to expand our leadership position through scale and new partnership models, 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,” says member of the board of management of Allianz SE, Christopher Townsend.
“Further, Sanlam shares our company values, our purpose of securing the future for our clients, and our long-term, generational approach to growing in new markets.” With the deal done, the agreement will be subject to required approvals from competition authorities, financial/insurance regulatory authorities and any customary conditions that Salam and/or Allianz would be required to fulfil for each jurisdiction. The chairmanship of the joint venture will rotate every two years between Sanlam and Allianz. The CEO of the entity will be named in due course.
Reacting, the Chief Executive Officer, Allianz Nigeria, Adeolu Adewumi-Zer, captured the moment, “I;m excited about this… both for Nigeria and for Africa.”
Africa’s finance industry is facing a major shake up, with mobile-phone giants and fintech start-ups challenging the traditional banking and insurance providers. That’s left established operators to urgently strive to adapt, introducing products and services to take advantage of rapidly growing digitisation and smartphone payments.
Sanlam shares gained 0.5% as of 9.41 am Johannesburg, while Allianz, the parent company of insuring giant Pimco, fell 0.8% in Frankfurt.